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Thursday 5th March 2026
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>> >> In. >> Order question.
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And. And. The. And.
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My Lords, I have voted. Contents
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My Lords, I have voted. Contents 214, not contents 142. So the 214, not contents 142. So the
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214, not contents 142. So the contents have. Amendment two. Lord Fuller. My Lords, it's. A pleasure to.
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And. And. The. And.
**** Possible New Speaker ****
My Lords, I have voted. Contents
**** Possible New Speaker ****
My Lords, I have voted. Contents 214, not contents 142. So the 214, not contents 142. So the
**** Possible New Speaker ****
214, not contents 142. So the contents have. Amendment two. Lord Fuller. My Lords, it's. A pleasure to.
13:12
Lord Fuller (Conservative)
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Lord Fuller (Conservative)
Now, my amendments are superficially similar, but they contain important differences identified in the explanatory identified in the explanatory statements. Both are designed to make these proposals consistent with the wider canon of the existing tax system, reducing confusion and improving long term confidence in the whole idea of doing the right thing, saving for your future and reducing the reliance on the state and later life. Amendment two and the reflecting on 18 from the mirror for Northern Ireland addresses the ability for employees to carry forward unused entitlements.
It's entirely consistent with the three year rule that already applies to pension contributions, of which more later, amendment three for Great Britain and the associated 19 for Northern Ireland seeks to protect those with variable incomes, perhaps in seasonal or weather dependent professions. So that will allow an employee with an irregular income to enjoy averaging over three years to ensure they are not disadvantaged compared to those on salaried payrolls. Now, this isn't new news. The principle of averaging is already established as part of the tax system.
Just look at farmers and market gardeners. So once more, my amendments seek to apply consistency across the entirety of this tax system and also within Great Britain and Northern Ireland. Now let's focus on two and 18. The carry forward and the three year rule. And I should say that if push comes to shove and the opportunity to devise a house arises, then I would seek to press to to a vote. Now on so far as carry forward is concerned and thinking in the employee engaged in seasonal work with variable pay, but who wants to save a regular amount each month on salary sacrifice? How does he set his regular monthly contribution at the beginning of the year, not knowing whether he'll bust his allowance at the end? Now, the three year rule for pensions help helpfully explains on the government website that you can carry forward unused allowances from the three previous tax years.
The allowance only applies to pension savings made to UK registered schemes and so forth. It exists because the government knows people have irregular incomes and especially for the self-employed, it can take months after the tax year to get your accounts done. So year to get your accounts done. So to be consistent and this is a pensions bill, my proposals would allow any salary sacrifice allowance to be carried forward for three years, subject to the proviso you can't sacrifice more than you you can't sacrifice more than you can earn.
Self-evidently and frankly, it's as simple as that. And outside the Treasury, in the real world, this bill would introduce a special unfairness to a particular type of hard working employee, juggling several jobs and make it nearly impossible for their employers to administer it. Now, millions of people work in tourism, hospitality and visitor attractions and sporting events. In many cases the second job. But pubs and restaurants certainly have variable seasonal hours. I'm thinking of the hourly paid, the shift workers, those working term time, those people who take up the slack in a modern economy and make it work and we need them.
And I must admit, I thought Labour Party existed to champion these people. But most people who save for a pension do make these monthly contributions, and it's difficult to nail down a value when your pay is up and down like a fiddler's elbow. So people are cautious. But that caution shouldn't be a reason why they shouldn't take advantage and miss out on the opportunity at the end of the year. So whether you're a civil servant or an ice cream seller, the ability to take advantage of salary sacrifice should be equally available to one and all.
Otherwise, we discriminate those at the bottom of the salary range who are striving the hardest. And this is why I seek to remedy through these amendments. And whilst I have you, it's also important for those people who move between jobs. Moving between jobs is a part of a thriving economy. It provides for labour market liquidity and allows trade to respond to changing circumstances. So let's not make it even harder by adding another bureaucratic friction to the labour market, damaging incentives and adding complexity, making it harder for people to do the right thing.
This is the risk that this bill brings to the table. Moving on and turning now to amendment six, in the name of my noble friend, Lord McKinley. To which I've added my name at committee. Last time we asked the reasonable question, who or what will be responsible for calculating the National Insurance for employees under a restricted and curtailed salary sacrifice regime for where their employees with multiple employments or fluctuating income. Will it be the employee or the employer? It's a reasonable question.
Last time, the Minister either didn't know or wouldn't say. From the blank faces in the box, it seemed that no one in the Treasury had given thought the matter. Much thought either. But it was said then this would all be dealt with by regulation, and I'm afraid this just will not wash if mistakes are made, however inadvertently, through complexity. Presumably there will be penalties, possibly criminal penalties. Clarity of where the buck stops need to be on the face of the bill.
You just can't make it up as you go along. And this is not being pedantic. I want to know, and so does everybody else who's going to be on the hook for this. If National Insurance is miscalculated for the millions with multiple employments in particular, who carries the can, perhaps I can be helpful. I have thought more about this than the Treasury appears to have done. Look, it can't be the employee who calculates this. They don't do the payroll arithmetic or manage Paye with the complexities of class one two for upper and lower earnings limits and other thresholds.
That much is clear nowadays. It's so complicated. You can only do it with specialist software, and you can't expect employees to have that. And in the event we know that only 3.8% of the self-employed have thus signed up to the quarterly making tax digital process so far from the 1st of April. No, it can't be the employee, but it can't be the employer either. Let's take the example of the employer who works at the employee who takes several jobs. How will her employee employer know when or if she's maximally sacrificed her two salaries without reference to the other? Unless, of course, the salary sacrifice limit is per employment, in which case I think that everyone's going to be content because that's what we're trying to achieve here.
But assuming not, how, is the employer to know whether his employee has multiple engagements? Even if he did, how is he going to apportion the allowance between the employers so the cap isn't broken in aggregate with so many conflicting thresholds, variations, cliff edges and combinations of self-employment upper and lower earnings limits, it's just unknowable. How is it going to work? Can it ever work by forcing 3.3 million people into self-assessment? Really? And how is the employee juggling several jobs going to calculated anyway? But if the noble Lord does wish to persist with this, the the law needs to be clear whether criminal liability for wrongdoing arises from this unnecessary complication.
It needs to be clear this is a slim bill with big consequences. It amounts to a poison pill dated for 2029, left for the next government to deal with. And in the meantime, nobody knows whether it's going to work or even whether it can work. This isn't just for the fat cats, the ham fisted way in which this bill ignores the real life complexity for those real life people and their real life examples that exist outside that cosy monthly paid final salary pension world in which the Treasury exists needs to be answered.
So how are HR and payroll departments, or the small, hard pressed small business owner in a manage these complex interactions? I ask, how is the government going to make it easy for people to save regularly and consistently into pension if they have multiple employments between jobs or variable pay? If we're to be consistent within the canon of the tax system and avoid gaps, then clearly a three year carryforward for salary sacrifice must come into it for equity and consistency. And otherwise, this is just another tax policy that is damaging the national economy and growth.
While the knighting incentives for individual employees and the companies which their work makes it harder to work hard, climb the ladder makes it harder to save for a secure retirement and makes it harms incentives for incentive employers to attract the best talent. It's the worst possible message at the worst possible time. I beg to move.
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Amendment proposed clause one, page two, line 14. At end. Insert
**** Possible New Speaker ****
the words on the Marshalled List. My Lords. I'm very pleased to
**** Possible New Speaker ****
My Lords. I'm very pleased to support my noble friend Lord Fuller, who has similarly reciprocated his who has similarly reciprocated his enthusiasm for one of my amendments. But quite a few things come to mind
It's entirely consistent with the three year rule that already applies to pension contributions, of which more later, amendment three for Great Britain and the associated 19 for Northern Ireland seeks to protect those with variable incomes, perhaps in seasonal or weather dependent professions. So that will allow an employee with an irregular income to enjoy averaging over three years to ensure they are not disadvantaged compared to those on salaried payrolls. Now, this isn't new news. The principle of averaging is already established as part of the tax system.
Just look at farmers and market gardeners. So once more, my amendments seek to apply consistency across the entirety of this tax system and also within Great Britain and Northern Ireland. Now let's focus on two and 18. The carry forward and the three year rule. And I should say that if push comes to shove and the opportunity to devise a house arises, then I would seek to press to to a vote. Now on so far as carry forward is concerned and thinking in the employee engaged in seasonal work with variable pay, but who wants to save a regular amount each month on salary sacrifice? How does he set his regular monthly contribution at the beginning of the year, not knowing whether he'll bust his allowance at the end? Now, the three year rule for pensions help helpfully explains on the government website that you can carry forward unused allowances from the three previous tax years.
The allowance only applies to pension savings made to UK registered schemes and so forth. It exists because the government knows people have irregular incomes and especially for the self-employed, it can take months after the tax year to get your accounts done. So year to get your accounts done. So to be consistent and this is a pensions bill, my proposals would allow any salary sacrifice allowance to be carried forward for three years, subject to the proviso you can't sacrifice more than you you can't sacrifice more than you can earn.
Self-evidently and frankly, it's as simple as that. And outside the Treasury, in the real world, this bill would introduce a special unfairness to a particular type of hard working employee, juggling several jobs and make it nearly impossible for their employers to administer it. Now, millions of people work in tourism, hospitality and visitor attractions and sporting events. In many cases the second job. But pubs and restaurants certainly have variable seasonal hours. I'm thinking of the hourly paid, the shift workers, those working term time, those people who take up the slack in a modern economy and make it work and we need them.
And I must admit, I thought Labour Party existed to champion these people. But most people who save for a pension do make these monthly contributions, and it's difficult to nail down a value when your pay is up and down like a fiddler's elbow. So people are cautious. But that caution shouldn't be a reason why they shouldn't take advantage and miss out on the opportunity at the end of the year. So whether you're a civil servant or an ice cream seller, the ability to take advantage of salary sacrifice should be equally available to one and all.
Otherwise, we discriminate those at the bottom of the salary range who are striving the hardest. And this is why I seek to remedy through these amendments. And whilst I have you, it's also important for those people who move between jobs. Moving between jobs is a part of a thriving economy. It provides for labour market liquidity and allows trade to respond to changing circumstances. So let's not make it even harder by adding another bureaucratic friction to the labour market, damaging incentives and adding complexity, making it harder for people to do the right thing.
This is the risk that this bill brings to the table. Moving on and turning now to amendment six, in the name of my noble friend, Lord McKinley. To which I've added my name at committee. Last time we asked the reasonable question, who or what will be responsible for calculating the National Insurance for employees under a restricted and curtailed salary sacrifice regime for where their employees with multiple employments or fluctuating income. Will it be the employee or the employer? It's a reasonable question.
Last time, the Minister either didn't know or wouldn't say. From the blank faces in the box, it seemed that no one in the Treasury had given thought the matter. Much thought either. But it was said then this would all be dealt with by regulation, and I'm afraid this just will not wash if mistakes are made, however inadvertently, through complexity. Presumably there will be penalties, possibly criminal penalties. Clarity of where the buck stops need to be on the face of the bill.
You just can't make it up as you go along. And this is not being pedantic. I want to know, and so does everybody else who's going to be on the hook for this. If National Insurance is miscalculated for the millions with multiple employments in particular, who carries the can, perhaps I can be helpful. I have thought more about this than the Treasury appears to have done. Look, it can't be the employee who calculates this. They don't do the payroll arithmetic or manage Paye with the complexities of class one two for upper and lower earnings limits and other thresholds.
That much is clear nowadays. It's so complicated. You can only do it with specialist software, and you can't expect employees to have that. And in the event we know that only 3.8% of the self-employed have thus signed up to the quarterly making tax digital process so far from the 1st of April. No, it can't be the employee, but it can't be the employer either. Let's take the example of the employer who works at the employee who takes several jobs. How will her employee employer know when or if she's maximally sacrificed her two salaries without reference to the other? Unless, of course, the salary sacrifice limit is per employment, in which case I think that everyone's going to be content because that's what we're trying to achieve here.
But assuming not, how, is the employer to know whether his employee has multiple engagements? Even if he did, how is he going to apportion the allowance between the employers so the cap isn't broken in aggregate with so many conflicting thresholds, variations, cliff edges and combinations of self-employment upper and lower earnings limits, it's just unknowable. How is it going to work? Can it ever work by forcing 3.3 million people into self-assessment? Really? And how is the employee juggling several jobs going to calculated anyway? But if the noble Lord does wish to persist with this, the the law needs to be clear whether criminal liability for wrongdoing arises from this unnecessary complication.
It needs to be clear this is a slim bill with big consequences. It amounts to a poison pill dated for 2029, left for the next government to deal with. And in the meantime, nobody knows whether it's going to work or even whether it can work. This isn't just for the fat cats, the ham fisted way in which this bill ignores the real life complexity for those real life people and their real life examples that exist outside that cosy monthly paid final salary pension world in which the Treasury exists needs to be answered.
So how are HR and payroll departments, or the small, hard pressed small business owner in a manage these complex interactions? I ask, how is the government going to make it easy for people to save regularly and consistently into pension if they have multiple employments between jobs or variable pay? If we're to be consistent within the canon of the tax system and avoid gaps, then clearly a three year carryforward for salary sacrifice must come into it for equity and consistency. And otherwise, this is just another tax policy that is damaging the national economy and growth.
While the knighting incentives for individual employees and the companies which their work makes it harder to work hard, climb the ladder makes it harder to save for a secure retirement and makes it harms incentives for incentive employers to attract the best talent. It's the worst possible message at the worst possible time. I beg to move.
**** Possible New Speaker ****
Amendment proposed clause one, page two, line 14. At end. Insert
**** Possible New Speaker ****
the words on the Marshalled List. My Lords. I'm very pleased to
**** Possible New Speaker ****
My Lords. I'm very pleased to support my noble friend Lord Fuller, who has similarly reciprocated his who has similarly reciprocated his enthusiasm for one of my amendments. But quite a few things come to mind
13:21
Lord Mackinlay of Richborough (Conservative)
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Lord Mackinlay of Richborough (Conservative)
But quite a few things come to mind in Lord Fuller amendment, and that is the normality across other parts of the tax system. It is very normal because life doesn't fit 6th of April to 5th of April every year. I mean, we can have a discussion why on earth about 6th of April, the 5th of April, but it doesn't fit those dates completely cleanly. Life changes on an annual basis. One might have a good year, one might have a bad year, and that is reflected in the pension contributions.
For tax purposes, one is allowed to carry forward three years worth of unused allowance. Currently, £60,000 of pension contribution is allowable if relevant earnings is sufficient. And technically in year four one could actually pay £240,000. So it seems very normal that we should be applying a similar carry forward of unused prior year benefits. As my noble friend the Lord Fuller has explained so eloquently. But the reason I've laid my amendment, amendment six and 22, which is the the mirror for Northern Ireland, is because of the total ambiguity that we heard at Committee stage last week.
Now, this legislation, if it has some flagship numbers and flagship ideas, £2,000, comes to light as one of those key ones. Now, after the noble Lord, the Minister last week was unable to actually assure the Committee stage whether the £2,000 was per employment or per employee to to manage for themselves. Hence, I've laid a very simple beyond doubt type amendment so that we can perhaps flush out from the Minister what is intended, and I have to tell him today that it will not be sufficient today to just merely say it will be sorted out.
Regulation and and advice and guidance in the future. I think we need to have this on the face of the bill, because it's what this bill is all about. Now, there are a number of thresholds in the National Insurance regulations. I mean, the numerous thresholds. I have them here. We have the primary threshold. We have then the secondary thresholds, we have upper earnings limits, we have a special thresholds for under 21 for apprentices, up to 25 for employees in freeports, employers and employees in investment zones, and special exemptions for veterans.
Now the employee themselves need not worry themselves about the complexity of those arrangements. They are all worked out by the employer on a per employment basis. And if an employee is in multiple employment, which is not uncommon these days, if circumstances were, for instance, that one was getting paid at the lower limit, then the accumulation of of benefits of National insurance payments, even though they may be at 0%, would apply across each of those employments.
So technically, no National Insurance might be paid in certain circumstances. So it seems to me surely a similar will need to apply for these regulations and the 2000 threshold, because if it does not, we have some extreme complications which no one Lords Minister explained and actually wanted to avoid in the nature of the amendment, one that we've just voted in favour of his his claim in in opposition to that amendment was the complexity across employments and and the employer would not know whether the employee in question would have a basic rate taxpayer or higher rate taxpayer.
Well, similar complexity seems to be in ambiguity within this bill, which I am now trying to solve. It surely must be per employment, because beyond that, there also is an issue of GDPR. Why should a second employer, or the primary employer or the tertiary employer? Why should they have the right to know what that employee is earning elsewhere? That is a matter of of secrecy, of privacy, of confidentiality and certainly GDPR. So if the idea here within this legislation, perhaps it will come out in the rules and, and guidance later is that this is 2000 per employee, I really struggle to understand how those confidentiality and the employee is entitled to can possibly be allowed to stand.
So my amendment is one of ease. It's one of let's just get this in the open now so that we know where it is, that the complexity that would apply across multiple appointments, employments does not come to pass. Otherwise, I think we may be left with the grave fear that National Insurance is going to become just yet another tax. Many of us have thought for thought for a very long time, that it really is a little bit of another tax, but its operation is very different, which makes it not a tax.
So we need to get this grounded down. Otherwise we will start to think is the next stage across all of those different rates that I've described within the National Insurance Administration rules, is that then going to apply for multiple employment? So National Insurance becomes a cumulative basis a little bit like tax. And I think that will be the fear that this is the government's new plan to take National Insurance as a new tax, so that in in some brevity, I could go on about this for some time as a chartered accountant and chartered tax adviser and still in practice, but I think this legislation is a sledgehammer to crack, a nut that doesn't even exist.
And it was so ably mentioned by the noble Lord, Lord Altman, why are we considering this today on the basis of 51 replies out of 250,000, employers surely leave this a year or so get a better sample rather more than 51, so that we can base government ideas on some facts rather than guesswork.
**** Possible New Speaker ****
Yeah, yeah Lord, I will. Speak to my amendment to my
**** Possible New Speaker ****
Speak to my amendment to my amendment number 20. In in respect to optional alternative arrangements. Can I thank the noble arrangements. Can I thank the noble Lord, the Minister, for his letter of last night setting out the position on optional remuneration arrangements? I think it's fair to say that was already in the public
For tax purposes, one is allowed to carry forward three years worth of unused allowance. Currently, £60,000 of pension contribution is allowable if relevant earnings is sufficient. And technically in year four one could actually pay £240,000. So it seems very normal that we should be applying a similar carry forward of unused prior year benefits. As my noble friend the Lord Fuller has explained so eloquently. But the reason I've laid my amendment, amendment six and 22, which is the the mirror for Northern Ireland, is because of the total ambiguity that we heard at Committee stage last week.
Now, this legislation, if it has some flagship numbers and flagship ideas, £2,000, comes to light as one of those key ones. Now, after the noble Lord, the Minister last week was unable to actually assure the Committee stage whether the £2,000 was per employment or per employee to to manage for themselves. Hence, I've laid a very simple beyond doubt type amendment so that we can perhaps flush out from the Minister what is intended, and I have to tell him today that it will not be sufficient today to just merely say it will be sorted out.
Regulation and and advice and guidance in the future. I think we need to have this on the face of the bill, because it's what this bill is all about. Now, there are a number of thresholds in the National Insurance regulations. I mean, the numerous thresholds. I have them here. We have the primary threshold. We have then the secondary thresholds, we have upper earnings limits, we have a special thresholds for under 21 for apprentices, up to 25 for employees in freeports, employers and employees in investment zones, and special exemptions for veterans.
Now the employee themselves need not worry themselves about the complexity of those arrangements. They are all worked out by the employer on a per employment basis. And if an employee is in multiple employment, which is not uncommon these days, if circumstances were, for instance, that one was getting paid at the lower limit, then the accumulation of of benefits of National insurance payments, even though they may be at 0%, would apply across each of those employments.
So technically, no National Insurance might be paid in certain circumstances. So it seems to me surely a similar will need to apply for these regulations and the 2000 threshold, because if it does not, we have some extreme complications which no one Lords Minister explained and actually wanted to avoid in the nature of the amendment, one that we've just voted in favour of his his claim in in opposition to that amendment was the complexity across employments and and the employer would not know whether the employee in question would have a basic rate taxpayer or higher rate taxpayer.
Well, similar complexity seems to be in ambiguity within this bill, which I am now trying to solve. It surely must be per employment, because beyond that, there also is an issue of GDPR. Why should a second employer, or the primary employer or the tertiary employer? Why should they have the right to know what that employee is earning elsewhere? That is a matter of of secrecy, of privacy, of confidentiality and certainly GDPR. So if the idea here within this legislation, perhaps it will come out in the rules and, and guidance later is that this is 2000 per employee, I really struggle to understand how those confidentiality and the employee is entitled to can possibly be allowed to stand.
So my amendment is one of ease. It's one of let's just get this in the open now so that we know where it is, that the complexity that would apply across multiple appointments, employments does not come to pass. Otherwise, I think we may be left with the grave fear that National Insurance is going to become just yet another tax. Many of us have thought for thought for a very long time, that it really is a little bit of another tax, but its operation is very different, which makes it not a tax.
So we need to get this grounded down. Otherwise we will start to think is the next stage across all of those different rates that I've described within the National Insurance Administration rules, is that then going to apply for multiple employment? So National Insurance becomes a cumulative basis a little bit like tax. And I think that will be the fear that this is the government's new plan to take National Insurance as a new tax, so that in in some brevity, I could go on about this for some time as a chartered accountant and chartered tax adviser and still in practice, but I think this legislation is a sledgehammer to crack, a nut that doesn't even exist.
And it was so ably mentioned by the noble Lord, Lord Altman, why are we considering this today on the basis of 51 replies out of 250,000, employers surely leave this a year or so get a better sample rather more than 51, so that we can base government ideas on some facts rather than guesswork.
**** Possible New Speaker ****
Yeah, yeah Lord, I will. Speak to my amendment to my
**** Possible New Speaker ****
Speak to my amendment to my amendment number 20. In in respect to optional alternative arrangements. Can I thank the noble arrangements. Can I thank the noble Lord, the Minister, for his letter of last night setting out the position on optional remuneration arrangements? I think it's fair to say that was already in the public
13:28
Lord Leigh of Hurley (Conservative)
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Lord Leigh of Hurley (Conservative)
say that was already in the public domain. And these actually raised these questions on Second Reading. I don't think the letter provides any illumination on the interpretation of what is and what is not optional remuneration arrangements in certain scenarios. Those scenarios we've discussed at previous readings, perhaps the one to highlight is collective bargaining. It's disappointing that there aren't many Labour peers here with a union background as as there was earlier this afternoon, but there's the situation. Is this whether collective bargaining is and for example, on the table are two options, one for, say, a 5% pay increase, plus keeping employer pension contributions at 8% and a second for a 4% pay increase, lower than the 5%, but an increased employer pension contribution of 10%.
And the workers take the latter. Is this an optional remuneration arrangement? I think by the definitions given, it is are the unions ready for this? Be assured that if this bill goes through, we will be pursuing this and unions will find to their horror that that their their members are paying National insurance when they have not thought that that would be the case. So this lack of guidance is was first raised by the Chartered Institute of Taxation, of which I appear to be a member.
When the Optional Remuneration Arrangement Arrangements legislation first came out in 2017, and it's still the case with new employees. If a new employee has a discussion with an employer before they are employed about their terms, is that is that is that an a salary sacrifice scheme? It's not clear. And certainly with terminations and in other situations. So the clarity needed to interpret the optional remuneration arrangements rules is clearly lacking. While employers and advisers have been doing their best to interpret the rules since they first came out with salary sacrifice, pension contributions being brought within the optional remuneration arrangement rules and most definitely being the largest in size and number benefit caused by these rules.
It significantly increases the risk that employers and employees will make mistakes, and it wouldn't be so bad if there was only one employer secondary class, one NIC at stake, but with employee primary, class one and NICs also being due, this creates a friction between employer and employee. If a mistake happens as to who picks up the tab, and HMRC usually assesses the employer, and then there's a question of whether the employer has a right of recovery against the employee. So there is lots in this bill that really isn't isn't thought through, isn't clear, is badly drafted.
And I have put down amendment 36 which causes for a delay and as that is less likely to be successful, I support amendment nine, which means that when these regulations come through, as they must, the proper, proper democracy is applied, proper
**** Possible New Speaker ****
scrutiny by this House. I Lord Mann I wish to speak very briefly and support my noble friend Lord McKinley and Lord Fuller in their amendments. Six and 22. As we've heard, the practical application of the 2000 cap per application of the 2000 cap per person must be clearly defined in primary legislation, leaving such a significant distinction whether the significant distinction whether the cap applies to an individual or to each job they may hold. The
And the workers take the latter. Is this an optional remuneration arrangement? I think by the definitions given, it is are the unions ready for this? Be assured that if this bill goes through, we will be pursuing this and unions will find to their horror that that their their members are paying National insurance when they have not thought that that would be the case. So this lack of guidance is was first raised by the Chartered Institute of Taxation, of which I appear to be a member.
When the Optional Remuneration Arrangement Arrangements legislation first came out in 2017, and it's still the case with new employees. If a new employee has a discussion with an employer before they are employed about their terms, is that is that is that an a salary sacrifice scheme? It's not clear. And certainly with terminations and in other situations. So the clarity needed to interpret the optional remuneration arrangements rules is clearly lacking. While employers and advisers have been doing their best to interpret the rules since they first came out with salary sacrifice, pension contributions being brought within the optional remuneration arrangement rules and most definitely being the largest in size and number benefit caused by these rules.
It significantly increases the risk that employers and employees will make mistakes, and it wouldn't be so bad if there was only one employer secondary class, one NIC at stake, but with employee primary, class one and NICs also being due, this creates a friction between employer and employee. If a mistake happens as to who picks up the tab, and HMRC usually assesses the employer, and then there's a question of whether the employer has a right of recovery against the employee. So there is lots in this bill that really isn't isn't thought through, isn't clear, is badly drafted.
And I have put down amendment 36 which causes for a delay and as that is less likely to be successful, I support amendment nine, which means that when these regulations come through, as they must, the proper, proper democracy is applied, proper
**** Possible New Speaker ****
scrutiny by this House. I Lord Mann I wish to speak very briefly and support my noble friend Lord McKinley and Lord Fuller in their amendments. Six and 22. As we've heard, the practical application of the 2000 cap per application of the 2000 cap per person must be clearly defined in primary legislation, leaving such a significant distinction whether the significant distinction whether the cap applies to an individual or to each job they may hold. The
13:32
Lord Ashcombe (Conservative)
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Lord Ashcombe (Conservative)
secondary legislation would create profound uncertainty. The administration of salary sacrifice schemes is already complex. It's unreasonable to expect each employer to know whether their part time employees have additional jobs elsewhere, let alone what they earn in those roles. Many of these additional jobs may be sporadic or seasonal, with even the employee unsure when work will arise or what their pay will be, particularly if commission based. It's difficult to believe that the government intends individuals with multiple jobs to track their own cumulative salary sacrifice across different employments.
Nor, I suggest, is it remotely feasible for HMRC to monitor such arrangements effectively. From a practical standpoint, this amendment is simply common sense. Turning quickly to those amendments in this group addressing the affirmative procedure, I believe that it's widely recognised that pension legislation is at best complicated, as I mentioned earlier, and particularly important to individuals when they retire. It's only right that changes in legislation concerning so many people and so much capital should be subject to proper parliamentary scrutiny.
This is not a political political issue, but one of immense importance and therefore should be subject to affirmative procedure.
Nor, I suggest, is it remotely feasible for HMRC to monitor such arrangements effectively. From a practical standpoint, this amendment is simply common sense. Turning quickly to those amendments in this group addressing the affirmative procedure, I believe that it's widely recognised that pension legislation is at best complicated, as I mentioned earlier, and particularly important to individuals when they retire. It's only right that changes in legislation concerning so many people and so much capital should be subject to proper parliamentary scrutiny.
This is not a political political issue, but one of immense importance and therefore should be subject to affirmative procedure.
13:33
Lord Freyberg (Crossbench)
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Lord Freyberg (Crossbench)
As mentioned in the previous group, the creative industries are group, the creative industries are defined by workers holding multiple short term contracts with different short term contracts with different employers across a single year. The central question this group of amendments addresses and has been amendments addresses and has been repeated several times today, is one that was put to the Minister in committee and remains unanswered. Is the 2000 contributions limit 2000 per person across all.
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Employments, or £2,000 per employment. The noble Lord Lord employment. The noble Lord Lord Livermore was asked precisely this by the noble Lord Hall Rich by the noble Lord Hall Rich Richboro, and is repeated today. His answer, and I quote from Hansard, was, and I quote, that Hansard, was, and I quote, that intention will be set out in regulations once we have fully consulted relevant employers. I have no doubt that consultation will be thorough. But for workers planning their finances now and employers designing payroll systems well before 2029, that leaves a gap.
The bill itself should fill amendment six and 22 fill it. The limit applies in relation to each
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Employments, or £2,000 per employment. The noble Lord Lord employment. The noble Lord Lord Livermore was asked precisely this by the noble Lord Hall Rich by the noble Lord Hall Rich Richboro, and is repeated today. His answer, and I quote from Hansard, was, and I quote, that Hansard, was, and I quote, that intention will be set out in regulations once we have fully consulted relevant employers. I have no doubt that consultation will be thorough. But for workers planning their finances now and employers designing payroll systems well before 2029, that leaves a gap.
The bill itself should fill amendment six and 22 fill it. The limit applies in relation to each
14:06
Baroness Kramer (Liberal Democrat)
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Baroness Kramer (Liberal Democrat)
information that it needs to assess the legislation, and I'm very glad we've now passed the language on affirmative resolution. But I also do want to thank the Minister for giving us clarity now on how the Cap operates, that it is per employment rather than per employee, and that is hugely important clarification. But my Lords, it throughout this bill, there is confusion over the numbers and the consequences. And to get greater clarification, my former colleague in pension expert, Sir Steve Webb, submitted an FOI to obtain the numbers that can explain the conclusions of the budget Red Book of November 2025 and the OBR Supplementary Analysis of 2026, as it refers to the impact of this bill.
So Steve's request was answered in part, but key requests were refused. And those are the requests that I'm trying to capture in 11. The amendment seeks the estimates used by HMRC of the number of basic rate taxpayers using salary sacrifice arrangements above 2000, a similar disclosure for higher and additional rate taxpayers. The expected number of employers expected to reduce their pension contributions for each group, and the contribution to the revenue numbers in the Red book from increases in employers NICs and separately, employees NICs.
As a consequence of this bill. With this information, we can make a reasonable judgement of the impact of the bill on workers, on employers and on pensions, and get a grip on the likelihood of the revenue outcomes forecasts in the Red book, which at present, as others have said, look exceedingly doubtful. Now. Sir Steve wasn't denied the disclosures he requested because they don't exist. Quite the opposite. HMRC said in his letter to him. We can confirm that HMRC holds the information you have requested.
The reason for the denial is to protect the integrity of the policy making process, and to prevent disclosures that would undermine this process, apparently, transparency, and I now quote again, needs to be weighed against the public interest in avoiding the disclosure of information which may inhibit the decision making process. My Lords, the information you've heard me list, it is not commercially sensitive. It isn't dealing with state secrets. We're not looking for transcripts on advice. We're simply looking for basic numbers that any person requires to assess this bill.
And I begin to think if the numbers were showing the light of day, the policy might possibly collapse. So that no regulation can be put in place until Parliament has seen and scrutinised this information, and I hope very much that the affirmative action resolution that we passed a few moments ago will help us do this. My Lords, this is simply a statement to the government is you need to give Parliament the Or. It needs to give Parliament the information and the numbers that it needs to be able to properly assess a piece of legislation.
Scrutiny is meant to be our job, and we can't scrutinise if the appropriate numbers are not provided. That's our data amendment.
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Proposed clause one, page two. Line 14. Insert the words as Lords.
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Lords. I rise very briefly just to support. I've added my name to Baroness Kramer amendments, and I Baroness Kramer amendments, and I do think that it would be helpful if the noble Lord, the Minister, would explain a little bit more would explain a little bit more about what the government believes, the intention and the outcome of this policy will be. He didn't answer my question earlier about
So Steve's request was answered in part, but key requests were refused. And those are the requests that I'm trying to capture in 11. The amendment seeks the estimates used by HMRC of the number of basic rate taxpayers using salary sacrifice arrangements above 2000, a similar disclosure for higher and additional rate taxpayers. The expected number of employers expected to reduce their pension contributions for each group, and the contribution to the revenue numbers in the Red book from increases in employers NICs and separately, employees NICs.
As a consequence of this bill. With this information, we can make a reasonable judgement of the impact of the bill on workers, on employers and on pensions, and get a grip on the likelihood of the revenue outcomes forecasts in the Red book, which at present, as others have said, look exceedingly doubtful. Now. Sir Steve wasn't denied the disclosures he requested because they don't exist. Quite the opposite. HMRC said in his letter to him. We can confirm that HMRC holds the information you have requested.
The reason for the denial is to protect the integrity of the policy making process, and to prevent disclosures that would undermine this process, apparently, transparency, and I now quote again, needs to be weighed against the public interest in avoiding the disclosure of information which may inhibit the decision making process. My Lords, the information you've heard me list, it is not commercially sensitive. It isn't dealing with state secrets. We're not looking for transcripts on advice. We're simply looking for basic numbers that any person requires to assess this bill.
And I begin to think if the numbers were showing the light of day, the policy might possibly collapse. So that no regulation can be put in place until Parliament has seen and scrutinised this information, and I hope very much that the affirmative action resolution that we passed a few moments ago will help us do this. My Lords, this is simply a statement to the government is you need to give Parliament the Or. It needs to give Parliament the information and the numbers that it needs to be able to properly assess a piece of legislation.
Scrutiny is meant to be our job, and we can't scrutinise if the appropriate numbers are not provided. That's our data amendment.
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Proposed clause one, page two. Line 14. Insert the words as Lords.
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Lords. I rise very briefly just to support. I've added my name to Baroness Kramer amendments, and I Baroness Kramer amendments, and I do think that it would be helpful if the noble Lord, the Minister, would explain a little bit more would explain a little bit more about what the government believes, the intention and the outcome of this policy will be. He didn't answer my question earlier about
14:09
Baroness Altmann (Non-affiliated)
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Baroness Altmann (Non-affiliated)
what is the rush of getting this measure through Parliament so fast? Has the government quantified the extra employer costs of the higher 15%, National Insurance 15%, National Insurance contributions from the employer, and the 8% or 2% extra National and the 8% or 2% extra National Insurance contribution per member quantified it in money terms, quantified it also in terms of what quantified it also in terms of what it will mean for pension provision
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and future pensioner poverty. My Lords, I thank the noble Lord,
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My Lords, I thank the noble Lord, the Minister, for listening so carefully as ever and considering the comments made by our benches, the amendments in the name of the noble Lady Baroness Cramer are well written and would ensure that written and would ensure that before regulations are made to implement the Cap, the government must publish the relevant information and how many basic rate information and how many basic rate taxpayers are affected. The policy rests, as we have heard on a on a concept of excess savings or at least tax advantaged excess savings, and it may catch a whole range of taxpayers who have insufficient savings.
And it's a very useful for us to try and tease out the difference between these two outcomes. And it's only possible if we have much more information on the distribution impacts of the policy, which the government should be very comfortable in sharing with us. Because as we debate this, we've heard quite a range of of observations on who is affected. The noble Lord, Lord Davis, gave it a colourful description of being affecting people with enormous bonuses, and that's one perspective. But the noble Lady Baroness Altmann reminds us that it goes against policy of very, very large numbers of people, have insufficient pension savings, and in other areas of government policy we're trying to rebalance that.
So the policy is
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and future pensioner poverty. My Lords, I thank the noble Lord,
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My Lords, I thank the noble Lord, the Minister, for listening so carefully as ever and considering the comments made by our benches, the amendments in the name of the noble Lady Baroness Cramer are well written and would ensure that written and would ensure that before regulations are made to implement the Cap, the government must publish the relevant information and how many basic rate information and how many basic rate taxpayers are affected. The policy rests, as we have heard on a on a concept of excess savings or at least tax advantaged excess savings, and it may catch a whole range of taxpayers who have insufficient savings.
And it's a very useful for us to try and tease out the difference between these two outcomes. And it's only possible if we have much more information on the distribution impacts of the policy, which the government should be very comfortable in sharing with us. Because as we debate this, we've heard quite a range of of observations on who is affected. The noble Lord, Lord Davis, gave it a colourful description of being affecting people with enormous bonuses, and that's one perspective. But the noble Lady Baroness Altmann reminds us that it goes against policy of very, very large numbers of people, have insufficient pension savings, and in other areas of government policy we're trying to rebalance that.
So the policy is
14:11
Lord Altrincham (Conservative)
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Lord Altrincham (Conservative)
dissonant in terms of pension savings. So the government should be very open and happy to share this information with us. And as this information with us. And as the noble Lady Baroness Kramer pointed out, they already have this information and may well it may information and may well it may well be sufficient evidence for us to appreciate that the incentives are rather marginal. The gains are rather marginal. The gains could be rather small. Based on the numbers that we've had in the debate, the numbers of of basic rate taxpayers that are supporting rate taxpayers that are supporting this policy would would be quite a small number, and the contribution would be extremely small to the to the tax take.
So it might be quite useful for us to reflect on whether it's really worth destabilising pension savings for that purpose. The noble Lady has done a good job in setting out the rationale for her amendment. I do not want to intrude further on your Lordships House in repeating her arguments, but these amendments are sensible and chime well with the amendments that we put down on these benches, which would require the affirmative resolution procedure for most regulations, a debate on those questions would be greatly aided by the information the noble Lady has set out, and we will be listening very carefully to the Minister's response.
My Lords, responding to amendments eight and 11 tabled by the noble Baroness, Lady Cramer and Lady Altmann, which would make commencement of the act conditional on publication of a number of estimates relating to the distributional impacts of the policy. The government, of course, agrees on the importance of transparency. However, we do not believe that additional publications are necessary to achieve that objective. A number of documents have already been published which set out the distributional impacts of this measure. The government's budget
So it might be quite useful for us to reflect on whether it's really worth destabilising pension savings for that purpose. The noble Lady has done a good job in setting out the rationale for her amendment. I do not want to intrude further on your Lordships House in repeating her arguments, but these amendments are sensible and chime well with the amendments that we put down on these benches, which would require the affirmative resolution procedure for most regulations, a debate on those questions would be greatly aided by the information the noble Lady has set out, and we will be listening very carefully to the Minister's response.
My Lords, responding to amendments eight and 11 tabled by the noble Baroness, Lady Cramer and Lady Altmann, which would make commencement of the act conditional on publication of a number of estimates relating to the distributional impacts of the policy. The government, of course, agrees on the importance of transparency. However, we do not believe that additional publications are necessary to achieve that objective. A number of documents have already been published which set out the distributional impacts of this measure. The government's budget
14:25
Division
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Division
The The question The question is The question is that My Lords, there have voted content 198 not content 139 I think. So the contents have it. Now. Come to amendment ten. Baroness Neville-Rolfe not moved. Oh, sorry. Moved formally. The question is that amendment ten be agreed to. As
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many as opinion will say content, of the contrary, not content. Not content.
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Not content. I think it's been moved formally, so it's consequential. I'm very so it's consequential. I'm very sorry, my Lords. My advice is that it's consequential. So I don't it's consequential. So I don't think you're allowed to shout. I think I think the contents have it. We now come to amendment 11.
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Baroness Kramer. Not moved.
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Not moved. That's correct. 12 that's the opinion of the House.
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House. The question is that amendment 12 be agreed to as many as are as
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12 be agreed to as many as are as many will say content. To the contrary, not content. Not content. The question will be decided by division. I shall notify the House division. I shall notify the House And And clear And clear the ball.
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The The question The question is The question is that The question is that amendment 12 be agreed to. As many as that 12 be agreed to. As many as that opinion will say content. Content to the contrary, not content.
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to the contrary, not content. content. Not content. Everybody was terribly quiet.
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Right. Next. Right, my Lord. The contents
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Right, my Lord. The contents will go to the right by the throne. The not contents to the left by the My My Lords, My Lords, the My Lords, the question My Lords, the question is My Lords, the question is that My My Lords, there have voted. Contents 194, not contents 140. So the contents have contents 140. So the contents have it. Right. Lords, we now come to amendment 13. Baroness Altmann not moved. Lord de Clifford amendment 14 not moved.
Number 15. Baroness Neville-Rolfe not moved 16. Baroness Neville-Rolfe test. The
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opinion of the House on this amendment relating to SMEs and charities. Well.
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Well. As many who are sorry, the question is this amendment be agreed to? As many as asked him was
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agreed to? As many as asked him was content to the contrary, not content. Content. The question will be decided by
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The question will be decided by another division. My Lords, I will inform the House when voting is over.
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Yes. OK.
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Yes. OK. Order. Voting is now open and The The question The question is The question is that amendment 16 be agreed to. As many as are of that opinion will say content to contrary, not content to the contents will go to the right by the throne and not contents to To. To. All. Right. Right. Yes. Right. Yes. That's. Right. Yes. That's.
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Yes.
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Yes. Yes. Agreed.
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My My Lords, My Lords, there My Lords, there have My Lords, there have voted
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My Lords, there have voted content 193 not content 143. So the content 193 not content 143. So the contents have it. My Lords, in clause two, amendments 17 Baroness Neville-Rolfe, which I think may be consequential a move formally the question is that amendment 17 be agreed to as many as have that opinion will say content. Content not content. The contents have it. Amendment 18 Lord Fuller not moved. OK. And 19 Lord Fuller also not moved 20 and 21 Lord Leigh of Hurley.
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20 not moved 21. Moved formally. Is 21 consequential? Yes. OK. So the question is that 21
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OK. So the question is that 21 be agreed to. As many as are of that opinion will say content. Content not content. The contents Content not content. The contents have it. 22 Lord Mackinlay not have it. 22 Lord Mackinlay not moved 2324 Baroness Neville-Rolfe not moved.
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not moved. Not moved 23 but 24. Is moved formally. 24 is consequential, is it correct? OK. The question is that 24 be agreed to. As many as asked opinion will say content, not content. The contents have it 25 Baroness Neville-Rolfe. That's moved formally as well. OK. The question is 25 be agreed to. As many as are of the opinion will say content, not content. The contents have it 26 Baroness Kramer moved. The question is that 26 be agreed to.
As many as are of that opinion will say content, not content. The contents have it. 27 Lord de Clifford not moved 28 and 29 Baroness Neville-Rolfe.
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Eight is not. Moved, but I'm going. 28 is moved forward, OK, 28 not
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28 is moved forward, OK, 28 not moved and 29 is consequential. The question is that amendment 29 be question is that amendment 29 be agreed to, as many others will say, content Of the contrary, not content. the contents have it after clause two, amendment 30 Lord Fuller not moved 31 Baroness
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many as opinion will say content, of the contrary, not content. Not content.
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Not content. I think it's been moved formally, so it's consequential. I'm very so it's consequential. I'm very sorry, my Lords. My advice is that it's consequential. So I don't it's consequential. So I don't think you're allowed to shout. I think I think the contents have it. We now come to amendment 11.
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Baroness Kramer. Not moved.
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Not moved. That's correct. 12 that's the opinion of the House.
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House. The question is that amendment 12 be agreed to as many as are as
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12 be agreed to as many as are as many will say content. To the contrary, not content. Not content. The question will be decided by division. I shall notify the House division. I shall notify the House And And clear And clear the ball.
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The The question The question is The question is that The question is that amendment 12 be agreed to. As many as that 12 be agreed to. As many as that opinion will say content. Content to the contrary, not content.
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to the contrary, not content. content. Not content. Everybody was terribly quiet.
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Right. Next. Right, my Lord. The contents
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Right, my Lord. The contents will go to the right by the throne. The not contents to the left by the My My Lords, My Lords, the My Lords, the question My Lords, the question is My Lords, the question is that My My Lords, there have voted. Contents 194, not contents 140. So the contents have contents 140. So the contents have it. Right. Lords, we now come to amendment 13. Baroness Altmann not moved. Lord de Clifford amendment 14 not moved.
Number 15. Baroness Neville-Rolfe not moved 16. Baroness Neville-Rolfe test. The
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opinion of the House on this amendment relating to SMEs and charities. Well.
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Well. As many who are sorry, the question is this amendment be agreed to? As many as asked him was
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agreed to? As many as asked him was content to the contrary, not content. Content. The question will be decided by
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The question will be decided by another division. My Lords, I will inform the House when voting is over.
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Yes. OK.
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Yes. OK. Order. Voting is now open and The The question The question is The question is that amendment 16 be agreed to. As many as are of that opinion will say content to contrary, not content to the contents will go to the right by the throne and not contents to To. To. All. Right. Right. Yes. Right. Yes. That's. Right. Yes. That's.
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Yes.
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Yes. Yes. Agreed.
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My My Lords, My Lords, there My Lords, there have My Lords, there have voted
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My Lords, there have voted content 193 not content 143. So the content 193 not content 143. So the contents have it. My Lords, in clause two, amendments 17 Baroness Neville-Rolfe, which I think may be consequential a move formally the question is that amendment 17 be agreed to as many as have that opinion will say content. Content not content. The contents have it. Amendment 18 Lord Fuller not moved. OK. And 19 Lord Fuller also not moved 20 and 21 Lord Leigh of Hurley.
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20 not moved 21. Moved formally. Is 21 consequential? Yes. OK. So the question is that 21
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OK. So the question is that 21 be agreed to. As many as are of that opinion will say content. Content not content. The contents Content not content. The contents have it. 22 Lord Mackinlay not have it. 22 Lord Mackinlay not moved 2324 Baroness Neville-Rolfe not moved.
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not moved. Not moved 23 but 24. Is moved formally. 24 is consequential, is it correct? OK. The question is that 24 be agreed to. As many as asked opinion will say content, not content. The contents have it 25 Baroness Neville-Rolfe. That's moved formally as well. OK. The question is 25 be agreed to. As many as are of the opinion will say content, not content. The contents have it 26 Baroness Kramer moved. The question is that 26 be agreed to.
As many as are of that opinion will say content, not content. The contents have it. 27 Lord de Clifford not moved 28 and 29 Baroness Neville-Rolfe.
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Eight is not. Moved, but I'm going. 28 is moved forward, OK, 28 not
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28 is moved forward, OK, 28 not moved and 29 is consequential. The question is that amendment 29 be question is that amendment 29 be agreed to, as many others will say, content Of the contrary, not content. the contents have it after clause two, amendment 30 Lord Fuller not moved 31 Baroness
14:52
Baroness Neville-Rolfe (Conservative)
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Baroness Neville-Rolfe (Conservative)
that of my noble friend Lord Bingham, and I thank Baroness Altmann and Lord Londesborough for putting their names to this amendment. I'd also like to speak amendment. I'd also like to speak to amendment 33, in the name of the noble Baroness, Lady Sattar, a charity professional in the best meaning meaning of the word. And meaning meaning of the word. And she's very sorry not to be here today. Her amendment is in the same spirit as ours, and she is right that the impact on charities is very, very important and should be kept under review.
His Majesty's Official Opposition will continue to be a voice for small and medium sized enterprises. We've heard time and time again from small businesses about the weight of burden that this government continues to pile upon them, tax after tax, regulation after regulation. Indeed, the Minister didn't even answer my question question time this morning about whether he would consider options for exempting SMEs from the burden of regulation. And this amendment presents such an opportunity for the government to demonstrate that they listen, to show that they take seriously the mountains of complexity heaped upon small business and small social enterprise, and to provide some measure of relief, some acknowledgement publicly that these cumulative pressures cannot be ignored indefinitely.
The Minister suggested in committee that only some 10% of employees in small and medium sized enterprises have pension contribution through salary sacrifice that exceed the proposed cap. That may well be the case today, my Lords, but with public awareness, more SMEs may introduce it. We on these benches would like to see that figure grow, as saving for a pension is one of the most desirable and most cost effective methods of saving. So I'm always explaining to the next generation. It is also one of the few tools available to a small employer competing against a large corporation for talent and productive workers.
My Lords, an independent review over a year would allow us all to consider the impact of the changes on SMEs and charities, and I beg to move.
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A member proposed. I find it in the minutes after clause two, insert the new clauses printed on
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the Marshalled List. Lord Dear.
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My Lords, I have added my name to amendment 31 and I would support to amendment 31 and I would support amendment 32 and 33. And all of these amendments are seeking to
His Majesty's Official Opposition will continue to be a voice for small and medium sized enterprises. We've heard time and time again from small businesses about the weight of burden that this government continues to pile upon them, tax after tax, regulation after regulation. Indeed, the Minister didn't even answer my question question time this morning about whether he would consider options for exempting SMEs from the burden of regulation. And this amendment presents such an opportunity for the government to demonstrate that they listen, to show that they take seriously the mountains of complexity heaped upon small business and small social enterprise, and to provide some measure of relief, some acknowledgement publicly that these cumulative pressures cannot be ignored indefinitely.
The Minister suggested in committee that only some 10% of employees in small and medium sized enterprises have pension contribution through salary sacrifice that exceed the proposed cap. That may well be the case today, my Lords, but with public awareness, more SMEs may introduce it. We on these benches would like to see that figure grow, as saving for a pension is one of the most desirable and most cost effective methods of saving. So I'm always explaining to the next generation. It is also one of the few tools available to a small employer competing against a large corporation for talent and productive workers.
My Lords, an independent review over a year would allow us all to consider the impact of the changes on SMEs and charities, and I beg to move.
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A member proposed. I find it in the minutes after clause two, insert the new clauses printed on
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the Marshalled List. Lord Dear.
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My Lords, I have added my name to amendment 31 and I would support to amendment 31 and I would support amendment 32 and 33. And all of these amendments are seeking to
14:55
14:55
Baroness Altmann (Non-affiliated)
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Baroness Altmann (Non-affiliated)
in smaller and medium sized companies. And I believe that the noble Lord, the Minister, did confirm that 99% or so of employers confirm that 99% or so of employers in auto enrolment are SMEs, and the in auto enrolment are SMEs, and the costs of complying with pension auto enrolment have already been significant, and some of these employers have been advised that it is what they call a no brainer for them to use salary sacrifice as a way of mitigating some of the extra costs involved in having to provide pensions for their staff who want to stay in them.
So we already have imposed these extra costs on employers. Some employers have been good enough to put in more than the auto enrolment minimum. What this bill would do is pile extra costs onto them, because if they are using salary sacrifice, they will have to renegotiate employment contracts, change the payroll software systems, and change the information they give to their workforce about their pension arrangements. Answer lots of That are being proposed. Therefore, I do think it should be incumbent on the government, and indeed, it is quite astonishing that it hasn't already done been done before we get this legislation that there is a proper review independently done, of the costs being imposed on smaller and medium sized employers.
As a result, a direct result of this legislation and that that should inform the way in which the legislation is implemented, so that we try to do whatever we can to avoid the kind of problems that we have seen, where there are implications for employment levels, salary levels, and indeed for pension investment and pension provision as a result of unintended consequences of perhaps well-meaning legislation or legislation designed to hit an entirely different target, which is now potentially going to fall on both employers and their workforce.
We've seen the National Insurance extra costs have had an impact on employment levels already. I ask the noble Lord, the Minister, once more, what is the rush in getting this legislation onto the statute books before? Clearly, the implications of what this is trying to do will mean in practice for the corporate sector. And would the noble Lord, first of all, explain the rush? And second of all, consider putting this on hold until the full implications are better understood.
So we already have imposed these extra costs on employers. Some employers have been good enough to put in more than the auto enrolment minimum. What this bill would do is pile extra costs onto them, because if they are using salary sacrifice, they will have to renegotiate employment contracts, change the payroll software systems, and change the information they give to their workforce about their pension arrangements. Answer lots of That are being proposed. Therefore, I do think it should be incumbent on the government, and indeed, it is quite astonishing that it hasn't already done been done before we get this legislation that there is a proper review independently done, of the costs being imposed on smaller and medium sized employers.
As a result, a direct result of this legislation and that that should inform the way in which the legislation is implemented, so that we try to do whatever we can to avoid the kind of problems that we have seen, where there are implications for employment levels, salary levels, and indeed for pension investment and pension provision as a result of unintended consequences of perhaps well-meaning legislation or legislation designed to hit an entirely different target, which is now potentially going to fall on both employers and their workforce.
We've seen the National Insurance extra costs have had an impact on employment levels already. I ask the noble Lord, the Minister, once more, what is the rush in getting this legislation onto the statute books before? Clearly, the implications of what this is trying to do will mean in practice for the corporate sector. And would the noble Lord, first of all, explain the rush? And second of all, consider putting this on hold until the full implications are better understood.
14:58
Lord Freyberg (Crossbench)
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Lord Freyberg (Crossbench)
My Lords, I rise to support amendment 31. It is of particular relevance to the creative industries requires an independent review of the Act's impact on small and medium sized enterprises within 12 months of passing, and specifically requires that review to examine the impact on those with irregular remuneration, seasonal working patterns, or multiple employments. That language describes almost exactly the working pattern of a freelance editor a set designer or editor moving between short term contracts across a year.
Many of the production companies, commercial houses, and independent studios that engage those workers are themselves SMEs. So amendment 31 would ensure that Parliament receives the evidence of how the act operates in practice for both the workers and the businesses that depend on them. I therefore urge the House to support it.
Many of the production companies, commercial houses, and independent studios that engage those workers are themselves SMEs. So amendment 31 would ensure that Parliament receives the evidence of how the act operates in practice for both the workers and the businesses that depend on them. I therefore urge the House to support it.
14:59
Lord Leigh of Hurley (Conservative)
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Lord Leigh of Hurley (Conservative)
I rise to support these amendments, particularly to declare an interest. I am involved in a an interest. I am involved in a number of SMEs, small and medium sized enterprises, and this mirrors sized enterprises, and this mirrors amendments we try to put in the Employment Rights Bill as it was, because we thought the government which was very disappointing. And representations were made and have been made in this instance by the bodies who represent such small businesses that they don't welcome this.
I put in a Freedom of Information request to the meetings that the employment Ministers had with trade representative bodies, because it was claimed that they were in favour of the Employment Rights Bill and an exemption for SMEs. I don't know whether governments had representations from SMEs in respect of this. It would be very interesting to hear from the Labour Lords Minister what they have said. And in respect of clause 33 charities, the Lord, the Minister, might recall that I put in three amendments to the NI Bill to first exempt charities, to then exempt social care homes, and lastly to exempt hospices.
The government didn't accept any of those. Surely the government wants to help charities as much as possible, particularly those such as hospices, who cannot raise revenue to compensate for any extra costs this might incur to them. So I very much hope the government considers this very carefully and show some flexibility. show some flexibility.
I put in a Freedom of Information request to the meetings that the employment Ministers had with trade representative bodies, because it was claimed that they were in favour of the Employment Rights Bill and an exemption for SMEs. I don't know whether governments had representations from SMEs in respect of this. It would be very interesting to hear from the Labour Lords Minister what they have said. And in respect of clause 33 charities, the Lord, the Minister, might recall that I put in three amendments to the NI Bill to first exempt charities, to then exempt social care homes, and lastly to exempt hospices.
The government didn't accept any of those. Surely the government wants to help charities as much as possible, particularly those such as hospices, who cannot raise revenue to compensate for any extra costs this might incur to them. So I very much hope the government considers this very carefully and show some flexibility. show some flexibility.
15:01
Lord Davies of Brixton (Labour)
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Lord Davies of Brixton (Labour)
Just just two points. First. I'm perhaps the only person in the House who believes in the National House who believes in the National Insurance Fund. I'm in favour of National Insurance Fund in principle found where people pay contributions in which they accrue entitlement to benefits. So I'm against a detached look at a very small part of the overall operation of National Insurance. It would clearly be a mistake. You have to look at the whole thing together. I'm not necessarily against that.
I I'm not necessarily against that. I suspect the Treasury won't be keen, but in principle, I think it's but in principle, I think it's something that there is time for. But that only makes sense. Second But that only makes sense. Second point that we look at the tax treatment of pension schemes. It's treatment of pension schemes. It's like the electric third rail of pensions politics. There's been a lot of discussion in the think tanks about the tax treatment.
And proposals have been made, such as flat rate relief. I think it's a massive subject. And again, one which is time for which it would be good to have a review. And I think it would be wrong for the same principle to look at this tiny part of the overall structure. And so I'm against the amendments. But I think the general principle that the issue needs to be looked at is a good one.
I I'm not necessarily against that. I suspect the Treasury won't be keen, but in principle, I think it's but in principle, I think it's something that there is time for. But that only makes sense. Second But that only makes sense. Second point that we look at the tax treatment of pension schemes. It's treatment of pension schemes. It's like the electric third rail of pensions politics. There's been a lot of discussion in the think tanks about the tax treatment.
And proposals have been made, such as flat rate relief. I think it's a massive subject. And again, one which is time for which it would be good to have a review. And I think it would be wrong for the same principle to look at this tiny part of the overall structure. And so I'm against the amendments. But I think the general principle that the issue needs to be looked at is a good one.
15:03
Lord Londesborough (Crossbench)
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Lord Londesborough (Crossbench)
My Lords, I rise to support amendment 31 under the name of Baroness Neville-Rolfe and to which Baroness Neville-Rolfe and to which I have added my name, but also to add my vocal support to Baroness Cramers. Amendment 32, which I realise I should have put my name to but haven't. But I would like to, and I do think that both of these on impact on SMEs. I'm more concerned about the s part of that. I think medium sized businesses with payrolls of over 100 staff are essentially a lot better equipped to deal with the provisions of this bill.
But I heard the noble Lord, the Minister, saying that, oh, you know, there's only 10% of this group who actually apply salary sacrifice. And I think that's a well, it's a glass half empty argument. Precisely because of that, we should be very concerned about the 90% that are missing out entirely on salary sacrifice. And when we're looking at the impact going back to amendment 31, the data this year for SMEs in the area of employment is utterly dire.
Vacancies, payroll, employment, part time and full time. I won't go through all the data, but I'll remind your Lordships that only ten days ago, the Federation of Small Businesses wrote a letter to the Chancellor of Exchequer warning that one third of its members are planning to either shut down their businesses this year or reduce their headcount. And that should send a real chill down the spine. I simply don't believe the government understands what it is to develop and foster a thriving SME ecosphere on which, at the bottom of the pyramid, our economic growth utterly depends.
And so I therefore throw my support behind these two amendments.
But I heard the noble Lord, the Minister, saying that, oh, you know, there's only 10% of this group who actually apply salary sacrifice. And I think that's a well, it's a glass half empty argument. Precisely because of that, we should be very concerned about the 90% that are missing out entirely on salary sacrifice. And when we're looking at the impact going back to amendment 31, the data this year for SMEs in the area of employment is utterly dire.
Vacancies, payroll, employment, part time and full time. I won't go through all the data, but I'll remind your Lordships that only ten days ago, the Federation of Small Businesses wrote a letter to the Chancellor of Exchequer warning that one third of its members are planning to either shut down their businesses this year or reduce their headcount. And that should send a real chill down the spine. I simply don't believe the government understands what it is to develop and foster a thriving SME ecosphere on which, at the bottom of the pyramid, our economic growth utterly depends.
And so I therefore throw my support behind these two amendments.
15:05
11:06
Royal Assent: Medical Training (Prioritisation) Act 2026, Rare Cancers Act 2026 and Sustainable Aviation Fuel Act 206
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Royal Assent: Medical Training (Prioritisation) Act 2026, Rare Cancers Act 2026 and Sustainable Aviation Fuel Act 206
life and wildlife is already the government is choosing a what as waterproof clothing Rather than pursuing
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Well, approach to attempting to ban PFAS. Now here. Well. Clearly we want to move
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Clearly we want to move and the noble Lady and the noble Lady we're working with the EU at the moment. There are negotiations. We know that the EU are looking We know that the EU are looking and clearly we need to be and working alongside the EU.
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Well, approach to attempting to ban PFAS. Now here. Well. Clearly we want to move
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Clearly we want to move and the noble Lady and the noble Lady we're working with the EU at the moment. There are negotiations. We know that the EU are looking We know that the EU are looking and clearly we need to be and working alongside the EU.
11:06
11:07
11:07
Baroness Ritchie of Downpatrick (Labour)
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Baroness Ritchie of Downpatrick (Labour)
and in in the foam of our fire retardants, which are in most mattresses. which are in most mattresses. Now, these produce effects in babies, which include cancers in later life which include cancers in later life The understanding that these which are leading to lower sperm which are leading to lower sperm it's really important we take here and at least follow
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here and at least follow As I said, we we will be taking And the noble Lady talked and it's really important that we make obviously, as much as we can. We do. We absolutely recognise And to point about mattresses The textiles industry is already but we do clearly need to do more. And I just like to assure noble Lords that the PFAS plan is the starting point, and it's the platform for So this is not the limit of our ambition.
So this is not the limit of our ambition.
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here and at least follow As I said, we we will be taking And the noble Lady talked and it's really important that we make obviously, as much as we can. We do. We absolutely recognise And to point about mattresses The textiles industry is already but we do clearly need to do more. And I just like to assure noble Lords that the PFAS plan is the starting point, and it's the platform for So this is not the limit of our ambition.
So this is not the limit of our ambition.
11:08
11:09
Baroness McIntosh of Pickering (Conservative)
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Baroness McIntosh of Pickering (Conservative)
Well, I think the simple we're doing carrying out we're doing carrying out We're working very closely with industry and business because, as I said, you know, in the textiles industry, you know, in the textiles industry, We need to work with other the private sector to the private sector to because the more we can do While we bring in our more detailed plans.
11:09
Baroness Hayman of Ullock, The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Labour)
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Baroness Hayman of Ullock, The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Labour)
Lord True the noble Lady may have seen in the Financial Times this week a major in the Financial Times this week a major article after a large article about the concerns about PFAS in sportswear, the concerns about PFAS in sportswear, which of course, if you are moving very fast in terms and absorption through the skin, there's a very large area of concern given there is so much public concern, obviously with sportswear, As the noble Lady Baroness Boycott said, surely the government far more rapidly than it's doing now.
far more rapidly than it's doing now.
far more rapidly than it's doing now.
11:10
Baroness Grender (Liberal Democrat)
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Baroness Grender (Liberal Democrat)
Well, as I said this, very much the starting point. And we are in negotiations with the EU. The EU is looking to what it wants And it's important that we we demonstrated that government something in this area because but it's also important It's also important that we and it's also important that we with the EU because we want eventually, with the EU because we want eventually, as I said, this is the starting point PFAS chemicals
11:10
Baroness Hayman of Ullock, The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Labour)
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Baroness Hayman of Ullock, The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Labour)
Rural community
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In rural community, pubs are not just for the local rural but also for the wider but also for the wider Does the noble Lady, the Minister, and does her department agree and does her department agree economy is most welcome from
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economy is most welcome from Absolutely. Diversity in rural economy Diversity in rural economy I just wondered if there's So I wonder if.
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In rural community, pubs are not just for the local rural but also for the wider but also for the wider Does the noble Lady, the Minister, and does her department agree and does her department agree economy is most welcome from
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economy is most welcome from Absolutely. Diversity in rural economy Diversity in rural economy I just wondered if there's So I wonder if.
11:11
Baroness Boycott (Crossbench)
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Baroness Boycott (Crossbench)
The noble Lady the.
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Sorry, I just wanted to Why is it that your government is now Why is it that your government is now looking like every other government, which is that when you get which is that when you get brave and act quickly, you brave and act quickly, you This lot was doing it some lot will be doing it next after you. some lot will be doing it next after you. Let's be brave. Let's grab something that not be getting cancer in Let's do it now.
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Sorry, I just wanted to Why is it that your government is now Why is it that your government is now looking like every other government, which is that when you get which is that when you get brave and act quickly, you brave and act quickly, you This lot was doing it some lot will be doing it next after you. some lot will be doing it next after you. Let's be brave. Let's grab something that not be getting cancer in Let's do it now.
11:12
Baroness Hayman of Ullock, The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Labour)
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Baroness Hayman of Ullock, The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Labour)
I can assure the noble Lord I'm >> I can assure the noble Lord I'm and will encourage the department to push and will encourage the department to push forward as best they can in this area. It is. It is important. And I do recognise the huge concern both
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in this house and out in the public. And we broadly welcome
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And we broadly welcome This is a starting point And I note what the Minister has said, And I note what the Minister has said, that this is an extremely complicated group of chemicals used in many, group of chemicals used in many, The Minister also spoke of Europe and the action that's being taken there. And fundamentally, there's And fundamentally, there's taken in Europe to the one So can I ask the Minister for further clarity about how we can have further cooperation with our European
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in this house and out in the public. And we broadly welcome
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And we broadly welcome This is a starting point And I note what the Minister has said, And I note what the Minister has said, that this is an extremely complicated group of chemicals used in many, group of chemicals used in many, The Minister also spoke of Europe and the action that's being taken there. And fundamentally, there's And fundamentally, there's taken in Europe to the one So can I ask the Minister for further clarity about how we can have further cooperation with our European
11:13
11:13
Baroness Hayman of Ullock, The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Labour)
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Baroness Hayman of Ullock, The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Labour)
We don't know yet. We are expecting them We are expecting them I think week that will be And then of course we will. And then of course we will. I'm sure we will be debating But as I say, our plan But as I say, our plan We want to work with the EU. We're waiting to see and then hopefully we can be more brave.
11:13
Baroness Bennett of Manor Castle (Green Party)
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Baroness Bennett of Manor Castle (Green Party)
and then hopefully we can be more brave. >> Second Oral Question
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My Lords, I beg leave Standing in my name on the Order Paper. As the report highlights,
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As the report highlights, harder for someone from a working class background to access the arts class background to access the arts This is clearly not acceptable. This is clearly not acceptable. Our 1.5 billion Arts Everywhere areas previously undersupported, areas previously undersupported, ensuring the arts should be for It is also why we are investing £132.5 million of dormant assets funding young people's access to a £9 million Creative Careers service, which will focus on tackling which will focus on tackling
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My Lords, I beg leave Standing in my name on the Order Paper. As the report highlights,
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As the report highlights, harder for someone from a working class background to access the arts class background to access the arts This is clearly not acceptable. This is clearly not acceptable. Our 1.5 billion Arts Everywhere areas previously undersupported, areas previously undersupported, ensuring the arts should be for It is also why we are investing £132.5 million of dormant assets funding young people's access to a £9 million Creative Careers service, which will focus on tackling which will focus on tackling
11:14
Baroness Hayman of Ullock, The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Labour)
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Baroness Hayman of Ullock, The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Labour)
My Lords, my takeaway from crucial points is how funding over many years has contributed to the neglect of a particular Would the Minister agree? If there is fiscal headroom, there not just in Manchester Two examples from the report such as rehearsal and studio spaces, largely ignored by successive governments. Secondly, the paucity of apprenticeships, Secondly, the paucity of apprenticeships, which need to be far more flexible Will the government take Will the government take
11:15
11:15
11:15
Lord Bird (Crossbench)
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Lord Bird (Crossbench)
should never depend on and we are committed to ensuring This includes looking This includes looking people to offer and take But more importantly, I feel it's But more importantly, I feel it's are in the room and that everyone
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My Lords, the music Chetham's in Manchester Chetham's in Manchester in Chester give talented backgrounds access to backgrounds access to These eight schools are a success story, yet their future is yet their future is after funding was frozen or cut
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My Lords, the music Chetham's in Manchester Chetham's in Manchester in Chester give talented backgrounds access to backgrounds access to These eight schools are a success story, yet their future is yet their future is after funding was frozen or cut
11:16
11:16
Earl Russell (Liberal Democrat)
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Earl Russell (Liberal Democrat)
So we're England to define and develop but that would also include working with the DfE on how we make sure that as many children as possible can access specialist and general music and dance education. We recognise that it's really important which is why there was a focus on this in the reformed National curriculum.
11:17
Baroness Hayman of Ullock, The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Labour)
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Baroness Hayman of Ullock, The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Labour)
The report. >> Suggests that something well, institutionalised snobbery exists, and also the fact that we suggest things and also the fact that we suggest things like dealing with apprenticeships. Does the Minister have in a sector dominated by we can make apprenticeships them more attractive to those employers?
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Yes. I think the apprenticeship
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I think the apprenticeship It is is a really critical part of making sure that it's not just who you know, but it's what you, what you, what, what your sort of future potential is. And I think that the way we are doing this And I think that the way we are doing this is by really focusing at making sure
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Yes. I think the apprenticeship
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I think the apprenticeship It is is a really critical part of making sure that it's not just who you know, but it's what you, what you, what, what your sort of future potential is. And I think that the way we are doing this And I think that the way we are doing this is by really focusing at making sure
11:17
11:18
Baroness Twycross, The Minister of State, Department for Culture, Media and Sport (Labour)
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Baroness Twycross, The Minister of State, Department for Culture, Media and Sport (Labour)
which is opening in 2028, which will provide 500 free which will provide 500 free which will break down I think one of the things that comes I think one of the things that comes and sort of some of which I agree was a really interesting, which I agree was a really interesting, if sobering read, was that if sobering read, was that actually know that these are So we're also investing in making careers opportunities and careers advice for young people that actually get them to know that these these are careers that We should be breaking looking at increasing the apprenticeship.
There's no use offering There's no use offering know they exist and don't take them up. know they exist and don't take them up.
There's no use offering There's no use offering know they exist and don't take them up. know they exist and don't take them up.
11:19
11:19
Baroness Twycross, The Minister of State, Department for Culture, Media and Sport (Labour)
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Baroness Twycross, The Minister of State, Department for Culture, Media and Sport (Labour)
I think I'd probably exceed or far exceed the sort of 75 word response we're supposed to give if but it includes lack of It includes not knowing about It includes schools not having which is why I referred to the fact that the curriculum review is focussed on arts, and why the Secretary of State including through music in libraries. I could go on. And I'm hoping that some of we're trying to deal with come
11:20
11:20
Baroness Twycross, The Minister of State, Department for Culture, Media and Sport (Labour)
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Baroness Twycross, The Minister of State, Department for Culture, Media and Sport (Labour)
We are aware of the basic income We're not considering a basic income We do, however, believe We do, however, believe second to none and are security and a regulatory where creative creativity can flourish. This is exemplified with Rights Bill and our commitment to appoint a freelance champion and our 5% uplift to national portfolio organisations, as well as committing to addressing in the grassroots music
11:21
Lord Addington (Liberal Democrat)
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Lord Addington (Liberal Democrat)
My Lords in January, Exeter Cathedral School announced it would be closing School announced it would be closing its doors at the end of this academic year after eight and a half centuries, training talented singers of training talented singers of solace and tranquillity Parents and staff have said that Parents and staff have said that on their fees and scholarships was The headmaster of Wells similarly warned that Access to choristers ship It's getting harder and harder to do that. Will the government think part of our living heritage not just those whose
11:21
Baroness Twycross, The Minister of State, Department for Culture, Media and Sport (Labour)
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Baroness Twycross, The Minister of State, Department for Culture, Media and Sport (Labour)
Yes. they they haven't been open to everyone. And I appreciate that there's and ending the tax breaks on VAT and business rates for private schools was a tough Additional funding to help government relating to And I think that the schools that in scope of the policy in order to but what we are doing is really that there's a better revitalised And that does include the bursaries that are
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Lords Minister of knowledge. The contribution made by The contribution made by to breaking down the barriers that she referred to by the partnerships that she referred to by the partnerships that those schools have with state schools, by which they open their facilities, by which they open their facilities, to children who are not
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to children who are not So when you look at that, it but there's a massive regional difference. So you get pockets of the country. So for example, that might work in London. It's not going to work in some parts of the north of England, which the report. It doesn't in every single part. So I think I think So I think I think can do is to make sure which educates around which educates around has a good offer for those children in has a good offer for those children in terms of access to arts education.
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Lords Minister of knowledge. The contribution made by The contribution made by to breaking down the barriers that she referred to by the partnerships that she referred to by the partnerships that those schools have with state schools, by which they open their facilities, by which they open their facilities, to children who are not
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to children who are not So when you look at that, it but there's a massive regional difference. So you get pockets of the country. So for example, that might work in London. It's not going to work in some parts of the north of England, which the report. It doesn't in every single part. So I think I think So I think I think can do is to make sure which educates around which educates around has a good offer for those children in has a good offer for those children in terms of access to arts education.
11:23
11:23
Baroness Twycross, The Minister of State, Department for Culture, Media and Sport (Labour)
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Baroness Twycross, The Minister of State, Department for Culture, Media and Sport (Labour)
of art have come from relied very largely on relied very largely on to develop their artistic to develop their artistic But I just want to ask does she think that does she think that to encourage people to provide patronage, to encourage people to provide patronage, to provide support privately to those that have these talents and are so important?
11:24
Lord Watts (Labour)
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Lord Watts (Labour)
I'm a big fan of philanthropy, our approach and the approach I think if if noble Lords would read the report, the original question referred to young people are aware of the systemic, widespread barriers to the information and knowledge to get And also make sure that And also make sure that the board and low pay early or no pay early on in people's career, or no pay early on in people's career, doesn't stop people without to private financing getting to private financing getting
11:24
11:25
Lord Parkinson of Whitley Bay (Conservative)
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Lord Parkinson of Whitley Bay (Conservative)
The question, standing in my >> The question, standing in my an interest as the Vice President an honour I share with my noble
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an honour I share with my noble My Lords, access to personalised discretionary personalised discretionary the recruitment and retention of as part of standard operational practice. DWP continually reviews how the service is delivered to drive improvements. Access to work has not the government consulted to work and how to improve the scheme so it helps more disabled people in work.
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an honour I share with my noble My Lords, access to personalised discretionary personalised discretionary the recruitment and retention of as part of standard operational practice. DWP continually reviews how the service is delivered to drive improvements. Access to work has not the government consulted to work and how to improve the scheme so it helps more disabled people in work.
11:25
Baroness Twycross, The Minister of State, Department for Culture, Media and Sport (Labour)
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Baroness Twycross, The Minister of State, Department for Culture, Media and Sport (Labour)
My Lords, last year >> My Lords, last year youngsters in employment youngsters in employment thanks to the support of But the fund, in truth, is in crisis. But the fund, in truth, is in crisis. There's a backlog of 60,000 33,000 people are waiting for payments. The system is overwhelmed Recently, the National Audit Office recommendations for major changes Can I ask my hon. Friend if she will use this report
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Yeah. I share my other friends and view of the importance of supporting the importance of supporting and that is what access The report is something that it's The report is something that it's It was published last a number of the pressures we already know. a number of the pressures we already know. It also noted the fact on access to work has and it began to escalate significantly
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Yeah. I share my other friends and view of the importance of supporting the importance of supporting and that is what access The report is something that it's The report is something that it's It was published last a number of the pressures we already know. a number of the pressures we already know. It also noted the fact on access to work has and it began to escalate significantly
11:26
Lord Pannick (Crossbench)
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Lord Pannick (Crossbench)
and it began to escalate significantly And application rates have and the government is now spending which is the highest ever We are looking at the range of and it's partly about So we're taking steps now. We increase the number of staff Last year. We've looked at operational but we are getting more but we are getting more through and that's making a difference. But also, my Lords, we It hasn't been looked at properly since It hasn't been looked at properly since it was introduced over 30 years ago.
We need to make sure We need to make sure
We need to make sure We need to make sure
11:27
Baroness Twycross, The Minister of State, Department for Culture, Media and Sport (Labour)
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Baroness Twycross, The Minister of State, Department for Culture, Media and Sport (Labour)
I totally agree with we're very fortunate in so deeply about this but may I make the point as well of people getting a job, and this is a point I wanted was, in practice, companies are very nervous indeed. On having somebody who is disabled I asked the Minister how we think we I asked the Minister how we think we Thank you.
11:27
11:28
Baroness Twycross, The Minister of State, Department for Culture, Media and Sport (Labour)
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Baroness Twycross, The Minister of State, Department for Culture, Media and Sport (Labour)
but some small and medium sized businesses don't know how they're nervous. They're difficult. They're worried about having They're worried about having We have a special service developed We have a special service developed where we can actually bridge conversations between help them to work out what they should do, help them to work out what they should do, what help they can get elsewhere. At the same time, we do At the same time, we do really big employers step up to the plate.
We shouldn't be in the situation are using access to work for one would hope they could have when they're buying keyboards So our job is to help because most of them want to. But he knows very much This can be challenging, and yet good workforce can be really In the end.
We shouldn't be in the situation are using access to work for one would hope they could have when they're buying keyboards So our job is to help because most of them want to. But he knows very much This can be challenging, and yet good workforce can be really In the end.
11:29
Baroness Sherlock, The Minister of State, Department for Work and Pensions (Labour)
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Baroness Sherlock, The Minister of State, Department for Work and Pensions (Labour)
is to get people out of the fund also pays for improvements and, and, and and developments in the home. and, and and developments in the home. When people are working from of great interest to the House of great interest to the House funds are going to support rather than working in rather than working in which is not quite the same in
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which is not quite the same in Lords, the noble Lord The scheme both helps people to get
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which is not quite the same in Lords, the noble Lord The scheme both helps people to get
11:29
Lord Touhig (Labour)
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Lord Touhig (Labour)
But it's it's an incredibly wide ranging. People can become anything People can become anything a single one off grant of £100 which they might keep for which they might keep for in that particular role There's a cap of £69,260 for There's a cap of £69,260 for levels of personal support a single piece of equipment, a single piece of equipment, British Sign Language support to do I do not have the figures about I'd be very happy to
11:30
Baroness Sherlock, The Minister of State, Department for Work and Pensions (Labour)
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Baroness Sherlock, The Minister of State, Department for Work and Pensions (Labour)
My Lords. Whilst I recognise that. Whilst I recognise that. >> Spending on access. >> To work has increased in recent ambition to support more ambition to support more this will most likely require and more training of specialist staff. Can I ask, therefore, has its welfare reforms will
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work and how the scheme can what may be an increased The right reverend Prelate
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The right reverend Prelate The government would hope that there The government would hope that there But also, one of the things we and reviewing access to work is and reviewing access to work is to look at how well supported as the point made by the noble Lord, Lord Stirling. How well supported are How well supported are to do the things that they can do well? So what's the right thing What can the individual do themselves, and what can the state do One of the challenges in recent we're getting very So I think broadly speaking, when
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work and how the scheme can what may be an increased The right reverend Prelate
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The right reverend Prelate The government would hope that there The government would hope that there But also, one of the things we and reviewing access to work is and reviewing access to work is to look at how well supported as the point made by the noble Lord, Lord Stirling. How well supported are How well supported are to do the things that they can do well? So what's the right thing What can the individual do themselves, and what can the state do One of the challenges in recent we're getting very So I think broadly speaking, when
11:31
Lord Sterling of Plaistow (Conservative)
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Lord Sterling of Plaistow (Conservative)
people traditionally applied of physical kit for a physical barrier. of physical kit for a physical barrier. We now may get something. The biggest single case of people There are cases, people coming through There are cases, people coming through with a range of learning conditions which are quite complex to which are quite complex to so we are having to review that But he makes an important In the light of that, what propose to access to And indeed, all job to close this horrific employment gap.
Yes.
Yes.
11:32
Baroness Sherlock, The Minister of State, Department for Work and Pensions (Labour)
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Baroness Sherlock, The Minister of State, Department for Work and Pensions (Labour)
I commend the noble Lord for >> I commend the noble Lord for been really grateful for him and I'm looking forward to discussing and I'm looking forward to discussing The government is looking at increasingly, how can we personalise our Employment advisers and our trained to make sure they But the next stage is back to employers. We can get individuals job ready. We've got to make sure are disabled person ready as well. So we're trying to do both in developing We not only consulted generally, committee working closely people from representatives, employers to look at how do So within that, we're trying to capture sure it carries on being personalised,
11:32
Lord Palmer of Childs Hill (Liberal Democrat)
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Lord Palmer of Childs Hill (Liberal Democrat)
and there's nothing more that we know how many that we know how many how many stay in work at, particularly after a year, particularly after a year, and how we can make sure that So can I ask the noble how the department keeps and how it ensures the expenditure helping people enter and stay in work?
11:33
Baroness Sherlock, The Minister of State, Department for Work and Pensions (Labour)
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Baroness Sherlock, The Minister of State, Department for Work and Pensions (Labour)
I commend the noble Lady both for >> I commend the noble Lady both for I mean, some really interesting, innovative work and also for It's always a pleasure to debate It's always a pleasure to debate to to value for money and She will remember. She will remember. I know from her time the previous government tried to look at. How do you assess only to find it's very course you don't have a counterfactual. You can't have a control group who on their own and compare to So what? So the NIO has flagged these issues to the department and we're So we're looking all the scheme in a way which demonstrates additional value for money, is not substituting for what employers and yet nonetheless is You can't get the money you need.
So just to reassure her, being taken into account being taken into account
So just to reassure her, being taken into account being taken into account
11:34
The Lord Bishop of Leicester (Bishops)
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The Lord Bishop of Leicester (Bishops)
When I was responsible for this in the minister's noble Lady, one of the problems we had people to want to take So I would urge her, whilst a win the fact that demand argument with the Treasury work being a net benefit And I can assure that she'll get cross-party support for it. Access to work is a fantastic scheme, that she's able to make to enable whether they're in a workplace whether they're in a workplace where that may suit them best.
11:34
Baroness Sherlock, The Minister of State, Department for Work and Pensions (Labour)
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Baroness Sherlock, The Minister of State, Department for Work and Pensions (Labour)
Yeah. the history lesson and for the support. The access to work has many challenges. Getting people to apply for it is It must be said. One of the challenges we have, though, is a lower spending We're still only supporting around 1% of the working disabled population. So it's also about what's amount of support to But I think that's a really helpful issue. That isn't now our challenge, and I'm grateful to him
11:35
Lord Holmes of Richmond (Conservative)
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Lord Holmes of Richmond (Conservative)
Fourth Oral Question >> Fourth Oral Question >> My Lords, I beg leave to ask a. Question standing in my
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Question standing in my My Lord, my. Lords, the data referred to does of small businesses in the UK are of small businesses in the UK are It shows only the number of below the VAT registration and does not include Of the 5.8 million million are registered for VAT
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Question standing in my My Lord, my. Lords, the data referred to does of small businesses in the UK are of small businesses in the UK are It shows only the number of below the VAT registration and does not include Of the 5.8 million million are registered for VAT
11:36
Baroness Sherlock, The Minister of State, Department for Work and Pensions (Labour)
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Baroness Sherlock, The Minister of State, Department for Work and Pensions (Labour)
I thank the Minister for his >> I thank the Minister for his First, an increasing number of First, an increasing number of are earning less than And second, a In fact, a decline big drop in those In fact, a decline of 26,000 In fact, a decline of 26,000 Is this because some are deliberately Is this because some are deliberately avoid the additional tax and admin avoid the additional tax and admin Or is it because higher have choked off their incentive to grow? Either way, it's surely time Yeah.
11:36
Baroness Stedman-Scott (Conservative)
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Baroness Stedman-Scott (Conservative)
I am grateful to noble I think it's neither of As I've said, the data relates only to VAT registered businesses. It does not include so I don't think it shows what If a business is already it has no incentive to because it's already to continue to do so even So why would they do what I don't think that would make any sense. If the noble Lord looks at he will also clearly see that So the conclusions he's trying to draw, I think, are very difficult to sustain.
11:37
Baroness Sherlock, The Minister of State, Department for Work and Pensions (Labour)
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Baroness Sherlock, The Minister of State, Department for Work and Pensions (Labour)
Is the. there is no shortage of studies from very reputable organisations the IMF, the OECD and others that bunching around a threshold. And that's not a surprise. Where they don't agree is whether be improved by raising the threshold So can can the the Minister the Treasury is not going effect and conclude that be higher and some say it should be lower, that they're happy to can the Minister assure us that being run that look at where because getting it right
11:38
Lord Harper (Conservative)
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Lord Harper (Conservative)
And I'm very happy to open my mind in response to the noble Lords question, response to the noble Lords question, the existing of bunching around and has been analysed by The OBR has explained that where some firms will cluster just below and pricing consequences of That is, I think, an inevitable feature of a threshold based tax system. He will know that decisions are taken only at fiscal events. Raising the threshold further would but it would also carry The UK threshold is already high The UK threshold of 90,000 compares to an average in And it could be argued, of course, that lowering the threshold could the distortions created by But the government is also But the government is also this could have on small businesses.
11:39
11:39
11:39
Lord Livermore, The Financial Secretary to the Treasury (Labour)
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Lord Livermore, The Financial Secretary to the Treasury (Labour)
for small and medium sized businesses, setting out support for smaller firms. We're partnering with industry We're partnering with industry growth through the adoption We're legislating to tackle late payments, We're legislating to tackle late payments, which cost the UK economy We're launching a new business We're launching a new business it easier to access advice and a national priority in our
11:40
Lord Londesborough (Crossbench)
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Lord Londesborough (Crossbench)
and a national priority in our And we're expanding the UK export and creating a small export
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So I can assure the noble Lord we're very aware of the points that he raises. The Midlands. Is the government.
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Is the government. Concerned about what seems to be which I think are not there which I think are not there but for some, in some to avoid tax and other things.
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to avoid tax and other things. Yes, absolutely. The government's very my noble friend raises my noble friend raises engaged in increased enforcement activity around exactly the points that he raises.
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around exactly the points that he raises. The Minister will be aware of against VAT abuse and Iran marketplaces are required transactions involving
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So I can assure the noble Lord we're very aware of the points that he raises. The Midlands. Is the government.
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Is the government. Concerned about what seems to be which I think are not there which I think are not there but for some, in some to avoid tax and other things.
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to avoid tax and other things. Yes, absolutely. The government's very my noble friend raises my noble friend raises engaged in increased enforcement activity around exactly the points that he raises.
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around exactly the points that he raises. The Minister will be aware of against VAT abuse and Iran marketplaces are required transactions involving
11:40
Lord Livermore, The Financial Secretary to the Treasury (Labour)
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Lord Livermore, The Financial Secretary to the Treasury (Labour)
The problem is that this. The current system has been exploited by proxy directors, proxy companies, artificial fragmentation artificial fragmentation the British Independent has written to the Exchequer has written to the Exchequer to ask for urgent which is probably costing HM which is probably costing HM Can he use his influence in HM Treasury Can he use his influence in HM Treasury to ensure that urgent consultation takes place immediately with those
11:41
Lord Fox (Liberal Democrat)
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Lord Fox (Liberal Democrat)
Yes, of course, I'm grateful for work and raising this with work and raising this with He knows that we are reviewing rules established under the previous, rules established under the previous, established under the previous government. And of course, as part of that review, those consultations will take place. And of course, I will bring it the executive secretary, to make sure that he
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of the noble Lord, mentions. OK. My Lords, for many small businesses,
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My Lords, for many small businesses, the VAT threshold is only one part and that includes rising National and that includes rising National business rates and minimum wage pressures, business rates and minimum wage pressures, and the increasing complexity and the increasing complexity This all hits enterprise the animal spirits that we need Does the noble Lord, the Minister, therefore see a case for lifting and for exempting SMEs from growing burden of regulations growing burden of regulations And if so, where would he start? And if so, where would he start?
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of the noble Lord, mentions. OK. My Lords, for many small businesses,
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My Lords, for many small businesses, the VAT threshold is only one part and that includes rising National and that includes rising National business rates and minimum wage pressures, business rates and minimum wage pressures, and the increasing complexity and the increasing complexity This all hits enterprise the animal spirits that we need Does the noble Lord, the Minister, therefore see a case for lifting and for exempting SMEs from growing burden of regulations growing burden of regulations And if so, where would he start? And if so, where would he start?
11:42
Lord Livermore, The Financial Secretary to the Treasury (Labour)
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Lord Livermore, The Financial Secretary to the Treasury (Labour)
Well, I've previously, discussed the issues surrounding The noble Lady may know imposes an upper limit on the threshold in Northern Ireland, and the Windsor framework is to the government's decisions So there are limitations She talks about the other decisions which she has consistently raising the minimum wage. But it's only because the Chancellor was able to the day before, that living having fallen under and that by the next election people
11:43
Lord Howell of Guildford (Conservative)
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Lord Howell of Guildford (Conservative)
It's. But, my Lords, small driver for creating jobs and employment. But can the Minister confirm higher than during the Covid pandemic, and youth unemployment is 14.1 15.9%? What is going wrong? What is going wrong? The Minister spent 18 months blaming Liz Truss, blaming Boris, blaming Liz Truss, blaming Boris, blaming everyone and blaming When is he actually going to take When is he actually going to take Yeah, yeah. to ask anyone else to take responsibility after the 14 years that they inflicted on us on this, this, this country.
Last week's labour market more people in work since Of course, there is more to do, before falling for every remaining ending lower at the end of the Parliament than it was at the beginning, the rate that we inherited the rate that we inherited
Last week's labour market more people in work since Of course, there is more to do, before falling for every remaining ending lower at the end of the Parliament than it was at the beginning, the rate that we inherited the rate that we inherited
11:44
11:44
11:45
Lord Livermore, The Financial Secretary to the Treasury (Labour)
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Lord Livermore, The Financial Secretary to the Treasury (Labour)
Well, that was the most, most enjoyable question most enjoyable question I'm grateful to him for talk about the last talk about the last We had austerity, followed by and the growth record of and the growth record of was an absolute catastrophe. He'll know from the from the forecasts week that growth has been increased That's only possible that we have brought about. Borrowing will be £18 billion It will fall every year of the forecast, and it will be below the G7 something that the previous government It's only because of those the stability and growth of this economy, decisions that the party opposite
11:46
Baroness Neville-Rolfe (Conservative)
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Baroness Neville-Rolfe (Conservative)
Yes.
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The Lord Privy Seal. My Lords, I beg to
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My Lords, I beg to in my name on the Order Paper. Question is that this motion
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Question is that this motion are that opinion will say content are that opinion will say content The contents have it Pension Schemes
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The contents have it Pension Schemes Baroness Sherlock. I beg to move that on my name in the Order Paper.
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The Lord Privy Seal. My Lords, I beg to
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My Lords, I beg to in my name on the Order Paper. Question is that this motion
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Question is that this motion are that opinion will say content are that opinion will say content The contents have it Pension Schemes
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The contents have it Pension Schemes Baroness Sherlock. I beg to move that on my name in the Order Paper.
11:46
Lord Livermore, The Financial Secretary to the Treasury (Labour)
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Lord Livermore, The Financial Secretary to the Treasury (Labour)
Question is that As many as of that opinion As many as of that opinion The contrary, not content. The contents have it. My Lords, we now come to two in grand committees Conditions and Amounts 2026 and one other motion That would be the Mesothelium The question is orders.
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The question is orders. Braver than me. The question. The question is that Baroness Sherlock be Baroness Sherlock be As many as of their opinion will say As many as of their opinion will say The contents have it. This may be a convenient to leave the house quietly
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The question is orders. Braver than me. The question. The question is that Baroness Sherlock be Baroness Sherlock be As many as of their opinion will say As many as of their opinion will say The contents have it. This may be a convenient to leave the house quietly
11:47
11:48
The Earl of Effingham (Conservative)
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The Earl of Effingham (Conservative)
Port of the
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That this report be now received. As many as are of that opinion will say content the contrary, not content. The contents have it in clause one,
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The contents have it in clause one, amendment one the Baroness Neville-Rolfe. My Lords, I'm pleased to
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My Lords, I'm pleased to on this Report stage by on this Report stage by of amendments tabled not only noble many respects Lords noble many respects Lords This group, in many respects shows
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That this report be now received. As many as are of that opinion will say content the contrary, not content. The contents have it in clause one,
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The contents have it in clause one, amendment one the Baroness Neville-Rolfe. My Lords, I'm pleased to
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My Lords, I'm pleased to on this Report stage by on this Report stage by of amendments tabled not only noble many respects Lords noble many respects Lords This group, in many respects shows
11:49
Lord Livermore, The Financial Secretary to the Treasury (Labour)
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Lord Livermore, The Financial Secretary to the Treasury (Labour)
the concerns held by noble Lords My first amendments in My first amendments in basic rate taxpayers from this policy. I am grateful to those the House who supported this the House who supported this and who recognise the seriousness and who recognise the seriousness This bill is a mistaken bill. It will limit incentives and reduce pensions adequacy. In our lively committee discussions, peers with business and tax experience and knowledge of pensions The responses from the noble Lord Lord Livermore did not allow our concerns.
On the contrary, they reinforce them. The government have been clear, notes and in statements in the other place, that this policy is intended to target higher earners.
On the contrary, they reinforce them. The government have been clear, notes and in statements in the other place, that this policy is intended to target higher earners.
11:50
Business of the House
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Business of the House
That is the stated purpose But that is not the reality. The Society of Pension The Society of Pension around one quarter of those and who will be caught by these and who will be caught by these And when this was put to And when this was put to In fact, he went further. He tells us that around 74% of That, my Lords, is the current does not allow for wage inflation in the period before that could increase the number of The new arrangements conveniently helping billion of revenue to satisfy their But, my Lords, the Minister's 26% of basic rate taxpayers More than 1 in 4 basic rate taxpayers using salary sacrifice will be hit.
The Minister also earning under 30,000 would be affected. So let us pause on that. This is a policy presented yet it will impact workers Surely that is, by a fundamental contradiction For a basic rate taxpayer, represents 2/5 of the value In practical terms, the marginal cost of this policy is four times higher for a lower paid worker than for and that is a very different The lower your income, Our amendment offers out by exempting basic rate we would align the policy If the aim is to target higher Let us not drag lower they were repeatedly told Lower savings today mean lower and lower retirement incomes the state that is neither fiscally Now, this is closely related to another one of my amendments in the group, which would which would under clauses one and two which the Treasury considers certain earners for the purposes of
The Minister also earning under 30,000 would be affected. So let us pause on that. This is a policy presented yet it will impact workers Surely that is, by a fundamental contradiction For a basic rate taxpayer, represents 2/5 of the value In practical terms, the marginal cost of this policy is four times higher for a lower paid worker than for and that is a very different The lower your income, Our amendment offers out by exempting basic rate we would align the policy If the aim is to target higher Let us not drag lower they were repeatedly told Lower savings today mean lower and lower retirement incomes the state that is neither fiscally Now, this is closely related to another one of my amendments in the group, which would which would under clauses one and two which the Treasury considers certain earners for the purposes of
11:53
11:53
Baroness Neville-Rolfe (Conservative)
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Baroness Neville-Rolfe (Conservative)
were higher, higher earners. I asked for a number people I asked for a number people a year, but the Minister Indeed, he did not engage Indeed, he did not engage Remember, some basic rate taxpayers They are not higher earners They are not higher earners should be honest about that. So what my amendment So what my amendment that when regulations are forthcoming and there are a lot of them provided the Treasury will do the right thing meet the policy intent of only This amendment would not It would not affect how the policy works.
It would ensure that we get lower and medium income That is the government's stated aim. And if the noble or the Minister meet the government's own test, The final one of my amendments concerns SMEs and charities of this bill and indeed Many of us have warned about this government is placing Think about the Employment Rights the spiralling business rates, U-turns and uncertainty, costs and indeed the previous NICs hike. The list goes on, and each small and medium sized They include family firms, start high street shops, care providers and charity They often do not have in-house tax They do not have margins that allow them to quietly absorb new fiscal shops.
Many do not offer salary sacrifice, Now it's more in the public consciousness. Thanks to this change, my the employers are small or a charity, or a social enterprise, the provisions of this If the government's intent behaviours concentrated then they should have that smaller employers At committee, the Minister sought to only 33% of small businesses offer My Lords, 1 in 3 small to the new cost and to the new complexity, is a very substantial proportion who make up the backbone And even for those not currently the signal sent by this pension flexibility structures carries risk at a time when we should be encouraging pension saving and responsible employer contributions, We are already seeing rising Business confidence is plummeting.
Unemployment rates remain stubbornly high. And against that backdrop, to extend further costs and uncertainty to smaller employers and to charities At committee, I did not feel the Minister fully grappled with that reality, and I hope that today he can demonstrate further on the cumulative and can explain what assessment has been made of the real world consequences. If the government truly understand, want to stand with small businesses they should have no hesitation in I also want to briefly speak to amendments in the name of the other noble Lords.
The noble Lady, Baroness which would raise the cap to This is a sensible proposal and middle income earners from and which would address the cost this policy would impose on SMEs. The government should seriously as proposed in my other But this is a good start. And if in due course, test the opinion of then we will be pleased to support her. The amendment in the name of Hurley would exempt salary, sacrifice, pension contributions included in student loan This is an eminently sensible to protect those who are as noble Lords will media and parliamentary coverage, graduates on the plan to loan are and this amendment would this policy would otherwise The student loan repayment as I know from talking to we must not further penalise people for striving and the amendment would help.
In a concrete way. Those graduates who are trying should the noble Lord the opinion of the House on this matter, then we would be pleased to support him. My Lords, for the sake of brevity, in this large group which such as that in the name Altmann and the noble I want to thank them for their throughout its stages all of which speak to the same concerns. My Lords, the Minister has After committee we shall be listening
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very carefully to his reply today.% Assume the noble Lady would
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Assume the noble Lady would I beg to move. Amendment. Proposed clause one, page one. Proposed clause one, page one. Line ten. After tax insert at
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After tax insert at Lords, I rise to support my
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Lords, I rise to support my It needs to say I agree with everything. My noble friend Baroness Neville-Rolfe This bill is a most unfortunate bill. It clearly has come about has said to her officials, Can you find it now? And out of the bottom which has been rejected by so many others. I don't think it was in the manifesto. It's just a opportunistic And it has most unfortunate side effects. As we will show in later the £5 billion that the OBR has It will fall far short of that.
And proof of that, of even the OBR recognises fall by half the following out what's going on The reason it won't raise 5 work out well in advance that there are simple ways round identified and therefore they So we're stuck with a bill that that having penalised workers increase now penalises for some bizarre reason, penalises And this is not a good time to be The noble Lord, the Minister, that the Chancellor believes a year better off by Really? Well, no friends of mine.
The Joseph Rowntree Foundation has rent and mortgage payments were total disposable income would No, no pandemic to rely on, Just that's what it is £40 a year. So this is not the time to impose in particular students, because one benefit of a pension salary sacrifice can be to reduce earnings liable to National Insurance for as the liability to repay based on their earnings, And frankly, there remains the policy interacts with student which are based on National If salary sacrifice pension the cap are treated as this will have knock on effects so it will mean higher effective reduced disposable income of incentives around pension savings.
The government hasn't yet These amendments seek to my amendments I am grateful to the national for their support of this to be able to test unless the government feels
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OK. Lords. This is a very.
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This is a very. Thank you. Lords. This is a very. Large group. With a number. Of issues.
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Of issues. To address. Firstly, I support my noble and Lord Altrincham in the amendment one. and Lord Altrincham in the amendment one. In this group, I remind Work and Pensions has Work and Pensions has around 14.6 million working age people Many of these individuals though certainly not all, and some will not have access to This amendment would ensure that
It would ensure that we get lower and medium income That is the government's stated aim. And if the noble or the Minister meet the government's own test, The final one of my amendments concerns SMEs and charities of this bill and indeed Many of us have warned about this government is placing Think about the Employment Rights the spiralling business rates, U-turns and uncertainty, costs and indeed the previous NICs hike. The list goes on, and each small and medium sized They include family firms, start high street shops, care providers and charity They often do not have in-house tax They do not have margins that allow them to quietly absorb new fiscal shops.
Many do not offer salary sacrifice, Now it's more in the public consciousness. Thanks to this change, my the employers are small or a charity, or a social enterprise, the provisions of this If the government's intent behaviours concentrated then they should have that smaller employers At committee, the Minister sought to only 33% of small businesses offer My Lords, 1 in 3 small to the new cost and to the new complexity, is a very substantial proportion who make up the backbone And even for those not currently the signal sent by this pension flexibility structures carries risk at a time when we should be encouraging pension saving and responsible employer contributions, We are already seeing rising Business confidence is plummeting.
Unemployment rates remain stubbornly high. And against that backdrop, to extend further costs and uncertainty to smaller employers and to charities At committee, I did not feel the Minister fully grappled with that reality, and I hope that today he can demonstrate further on the cumulative and can explain what assessment has been made of the real world consequences. If the government truly understand, want to stand with small businesses they should have no hesitation in I also want to briefly speak to amendments in the name of the other noble Lords.
The noble Lady, Baroness which would raise the cap to This is a sensible proposal and middle income earners from and which would address the cost this policy would impose on SMEs. The government should seriously as proposed in my other But this is a good start. And if in due course, test the opinion of then we will be pleased to support her. The amendment in the name of Hurley would exempt salary, sacrifice, pension contributions included in student loan This is an eminently sensible to protect those who are as noble Lords will media and parliamentary coverage, graduates on the plan to loan are and this amendment would this policy would otherwise The student loan repayment as I know from talking to we must not further penalise people for striving and the amendment would help.
In a concrete way. Those graduates who are trying should the noble Lord the opinion of the House on this matter, then we would be pleased to support him. My Lords, for the sake of brevity, in this large group which such as that in the name Altmann and the noble I want to thank them for their throughout its stages all of which speak to the same concerns. My Lords, the Minister has After committee we shall be listening
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very carefully to his reply today.% Assume the noble Lady would
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Assume the noble Lady would I beg to move. Amendment. Proposed clause one, page one. Proposed clause one, page one. Line ten. After tax insert at
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After tax insert at Lords, I rise to support my
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Lords, I rise to support my It needs to say I agree with everything. My noble friend Baroness Neville-Rolfe This bill is a most unfortunate bill. It clearly has come about has said to her officials, Can you find it now? And out of the bottom which has been rejected by so many others. I don't think it was in the manifesto. It's just a opportunistic And it has most unfortunate side effects. As we will show in later the £5 billion that the OBR has It will fall far short of that.
And proof of that, of even the OBR recognises fall by half the following out what's going on The reason it won't raise 5 work out well in advance that there are simple ways round identified and therefore they So we're stuck with a bill that that having penalised workers increase now penalises for some bizarre reason, penalises And this is not a good time to be The noble Lord, the Minister, that the Chancellor believes a year better off by Really? Well, no friends of mine.
The Joseph Rowntree Foundation has rent and mortgage payments were total disposable income would No, no pandemic to rely on, Just that's what it is £40 a year. So this is not the time to impose in particular students, because one benefit of a pension salary sacrifice can be to reduce earnings liable to National Insurance for as the liability to repay based on their earnings, And frankly, there remains the policy interacts with student which are based on National If salary sacrifice pension the cap are treated as this will have knock on effects so it will mean higher effective reduced disposable income of incentives around pension savings.
The government hasn't yet These amendments seek to my amendments I am grateful to the national for their support of this to be able to test unless the government feels
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OK. Lords. This is a very.
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This is a very. Thank you. Lords. This is a very. Large group. With a number. Of issues.
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Of issues. To address. Firstly, I support my noble and Lord Altrincham in the amendment one. and Lord Altrincham in the amendment one. In this group, I remind Work and Pensions has Work and Pensions has around 14.6 million working age people Many of these individuals though certainly not all, and some will not have access to This amendment would ensure that
12:03
Lord Leigh of Hurley (Conservative)
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Lord Leigh of Hurley (Conservative)
by the proposed 2000 cap As a result, no basic rate into what I could only into what I could only In committee. The noble Lord stated more than The noble Lord stated more than only pay basic rate of tax currently only pay basic rate of tax currently and who benefit from would be unaffected by the £2,000 limit before the National However, this necessarily means figure has been provided for how Percentages alone can without the underlying numbers.
Therefore, I'd be grateful the House how many employees so that we may properly understand who stand to be impacted. This brings me directly to the government what The answer given in committee May I therefore ask as my noble friend Baroness to be transparent and provide a clear Is it 50,000 or is it some other number? I do not think this is too much to ask. As for the amendment five, my noble friend Lord Leigh there are already many students, including my son's, caught by fleece this cohort of individuals If salary sacrifice payments are they will never have a sufficient pension.
And no doubt some future government Next, I would like to address As I've mentioned, the proposed Moreover, it fails to take may on occasion receive who may on occasion receive contribute to their pension through The noble Baroness, Lady provides for a £5,000 cap, which would give employees only to save more towards but also to avoid a substantial On such a windfall, provided This is a far more realistic While I would prefer as in the amendments in Lady Altmann, I fear that My Lords, the amendments in the name of the noble Lord, Lord de Clifford, and those in the names of Neville-Rolfe and Lord Altrincham, both address another issue the quiet but persistent impact of fiscal drag.
This is one of the most insidious raise revenue without With such a modest cap it risks being rapidly placing an unnecessary burden Precisely the group for whom pension
Therefore, I'd be grateful the House how many employees so that we may properly understand who stand to be impacted. This brings me directly to the government what The answer given in committee May I therefore ask as my noble friend Baroness to be transparent and provide a clear Is it 50,000 or is it some other number? I do not think this is too much to ask. As for the amendment five, my noble friend Lord Leigh there are already many students, including my son's, caught by fleece this cohort of individuals If salary sacrifice payments are they will never have a sufficient pension.
And no doubt some future government Next, I would like to address As I've mentioned, the proposed Moreover, it fails to take may on occasion receive who may on occasion receive contribute to their pension through The noble Baroness, Lady provides for a £5,000 cap, which would give employees only to save more towards but also to avoid a substantial On such a windfall, provided This is a far more realistic While I would prefer as in the amendments in Lady Altmann, I fear that My Lords, the amendments in the name of the noble Lord, Lord de Clifford, and those in the names of Neville-Rolfe and Lord Altrincham, both address another issue the quiet but persistent impact of fiscal drag.
This is one of the most insidious raise revenue without With such a modest cap it risks being rapidly placing an unnecessary burden Precisely the group for whom pension
12:07
Lord Ashcombe (Conservative)
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Lord Ashcombe (Conservative)
saving is the most vital to support. So I very much support those amendments. So I very much support those amendments. Finally, turning to the amendments 16 and 27 concerning and 27 concerning Last week in committee, Last week in committee, changes that these including the cost of energy, which would now appear to be heading which would now appear to be heading even further in the wrong direction. My Lords pursuing committee. And now this has become very personal. As one of my children working redundant yesterday due to and this bill has not yet hit, I truly wonder if that This bill is surely another nail in and I suspect a number of companies They simply do not have And yet this government insists not only through greater but substantial additional They will need to hire this difficult and pernicious legislation.
It will not surprise you very much support these amendments.
**** Possible New Speaker ****
My Lords, I speak today in support of all the amendments in this group, of all the amendments in this group, but in particular amendments 12 and 26, in the name of Baroness in the name of Baroness and to my own amendments, 14 and 27, I would have added my name to I would have added my name to but sadly I was a bit slow I wish to remind the house of my dreams of I wish to remind the house of my dreams of being an owner of an SME and an employer.
Both these sets of amendments seek to increase the limit in separate ways. I have spoken at both the proposal mainly impacts
It will not surprise you very much support these amendments.
**** Possible New Speaker ****
My Lords, I speak today in support of all the amendments in this group, of all the amendments in this group, but in particular amendments 12 and 26, in the name of Baroness in the name of Baroness and to my own amendments, 14 and 27, I would have added my name to I would have added my name to but sadly I was a bit slow I wish to remind the house of my dreams of I wish to remind the house of my dreams of being an owner of an SME and an employer.
Both these sets of amendments seek to increase the limit in separate ways. I have spoken at both the proposal mainly impacts